After a few weeks in over sold condition, stocks finally had a nice technical rebound. The S&P 500 index closed this week at 1216 up 5.35%, the Dow Jones Industrial Average gained 4.7%, and the Nasdaq composite index increased 6.25%. Notice that S&P 500 index is still trading within the range of 1120 and 1250. The first step to reverse the down trend is for S&P 500 index to break the upper bound of 1250.
From the weekly chart of S&P 500 index, the momentum index, STO, is moving up and the price is trading in the rising channel. These are all good signs, however, one week up does not make the trend. Before the STO climbing above 50, we will wait patiently on the sideline.
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