Was the market doing anything last week?

We seemed to have experienced enormous volatility last week but if you think about for a minute, the market was not really doing anything during the week in terms of its levels. The best I can say about the market is the words restless and directionless. Bulls and bears were both fighting hard with each other but in the end neither of them could really win decisively. So where are we going from here?


Since the very beginning of this correction, I have said that I don't think this is the start of a long lasting bear market and I still believe we may likely see higher stock prices during the later part of the year. So if you don't mind the short term volatility very much and are itchy to get in, buying and holding good stocks may make you happy few months from now. But you certainly need to be prepared for potentially significant paper loss before seeing good gains. The bulls still have a lot of work to do to overcome many grave hurdles before talking about new highs. See the chart below. The initial strong resistance is its 50 DMA at 2730 and then the downtrend line around 2750. After that, the double top resistance around 2800 and only after that, there is a meaningful hope to challenge the high around 2875. Can the market have enough strength to go straight up to complete the correction? Anything is possible but it will be a mirage type of hope to me! The daily and weekly technicals are still not looking great and there is a great chance that the bears will mount another major attack in the next few days or weeks to shake out all the weak hands before finally satisfied. No guarantee for sure but I think there is a high chance we may see it happen. I maintain my caution for you: don't chase highs for now!