The major indexes put in nice gains on Friday, driven by Bernanke’s comments on inflation moderating, which is being helped by lower commodity prices. However, the volume behind Fridays move was extremely low which doesn’t say much for the conviction behind this move.
The S&P 500 rallied to the previous support line of this falling wedge pattern, which is now acting as resistance.
It is very common for charts to revisit broken support lines before resuming their next leg lower. This chart should be watched closely for a clue to the overall markets next move.
There was a trigger from the Watchlist on Friday, it was APPL. Like most stocks, volume was lower than average. It made a small move above the entry point, and closed slightly below the entry point.
ENER is a recent trigger, which I was stopped out of but got back into. It made a nice move Friday, and could be getting ready to test previous highs made in June.
Next Monday is Labor Day, and if history is any indicator, then the last half of this week should have a bullish bias, but with low volume, especially on Friday. We should also see more volume move into the market later next week.
I have a few stocks to watch this week. These will likely be day trades if they trigger.
Good luck and good trading!
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