Introduction It will take a few days for markets to digest recent economic news, but it was clear before any announcements were made this week that the rally from October lows had stalled, and markets have now entered a new phase.  The S&P had broken its upward trend on the early week releases of CPI data and FOMC Meeting Notes, but had managed to rally back on positive news from Apple and Amazon. And while the S&P enters a tug-of-war period between bulls and bears, its still 10% above last summer's peak, and 25% above the lows of last October. A breakdown doesn’t necessarily mean a bear market is about to begin, it could simply be the slowing of its prior advance, and more likely, the start of a sideways shift in the market. Image: Stockcharts.com S&P long-term chart Investors will always fear the crash, but one only has to look at a long term chart of an index to see how these declines have ultimately just been pauses as part of a longer advance.  Image: Google Financ

I'll cover daily charts during the week, but I wanted to look at the weekly picture. Friday was an ugly day on daily timeframes, but weekly charts are holding up well. The Nasdaq is the in the early stage of a rolling top, but I would be looking to the 20-week MA to attract buyers, although in August 2023 this moving average only offered brief support befoer it was breached.

Today belonged to the Nasdaq with Apple and Amazon key contributors to these gains. The index is now challenging the 'bull trap' after recent struggles. Again, we are likely looking at sideways action, but if there is follow through over the coming days it will mark a confirmed follow through for the index.

Markets threatened a rout after sellers struck at Tuesday's open, but a rally after the hour managed to right the ship and by the close of business lead markets where showing "dragonfly doji" candlesticks. A dragonfly doji is typically a bullish reversal candlestick, but only in the context of an oversold market which is not the case here. Of course, later today we have a slew of economic data that could deliver dramatic swings in the market (both ways), so there is a certain level of pent-up tension leading into this. With that in mind, we have a Russell 2000 ($IWM) that continues to feel the squeeze as the ascending triangle trendline squeezes into breakout resistance and the March "bull trap". Trading volume has been very tepid over the last few days - typical of a consolidation - so look for this to pick up when support or resistance is broken.