The popular averages closed mixed on Wednesday. Nevertheless, all three are close to their record highs. The minutes of the late July FOMC meeting indicated diverse opinions regarding policy. The Fed chairwoman will be speaking from Wyoming on Friday. Meanwhile, the price of crude oil rose while gold fell on Wednesday.
Above is my 3-month chart of the S&P 500 exchange traded fund (SPY). It was soaring in February following a January pullback. After a new high was recorded in early April, another drop occurred as newsletter writers were warning people of a bubble that could burst. That April drop beneath the 50-day moving average was quickly erased. Money moving out of stocks and into bonds led to more tests of that moving average before a nice rise to record highs commenced.
The down-thrust amid high trading volume on July 31 shoved the SPY beneath its 50-day moving average. That caused my outlook arrows to retreat to neutral. During the week-before-last the price move alternated each day with the net result a slight gain and repainting my weekly arrow green. On both Thursday and Friday last week the SPY closed virtually at its 50-day MA. That allowed my monthly arrow to join my weekly arrow. The sharp move above that level on Monday sounded the all-clear for all of my time frames. The continuation this week has been reassuring.
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