Yes, Thursday was another up day in the stock markets, but the acceleration from last week’s deeply oversold conditions slowed, as volume contracted. The SPX still gained nearly 1% thanks to a late afternoon surge, bringing the weekly gain to 4.7%.
We saw action like this in late May and mid June, only to have the downtrend resume. Whether this bounce turns into a sustained rally is anyone’s guess. To me the charts look like the primary trend is down, with counter-trend up moves of the sort just described, creating a series of lower highs and lower lows:
(click on chart to expand)
If the SPX can break the upper boundary line of this trend channel, then we’re in business. If not, we’re still playing defense.