U.S. Stocks: Bulls Must Be Patient
Eric De Groot | Oct 17, 2014 07:15AM ET
A backdrop of fear, a setup that can linger for months, thus, demanding patience from eager bulls, should support a rally soon. This rally must be considered an upside reaction within a downtrend of the cause building phase until the message of the market changes. The relatively heavily volume decline, an indication of expanding downside force, raises the probability that the support zones (green lines and/or 10/15 low) will be tested again. Volume driving the reactionary rally will help 'time' this retest. If previous support acts as resistance as volume contracts significantly, it suggests waning upside force and vulnerability. Vulnerable rallies often reverse unexpectedly. Resistance zones on the NYSE Composite 10130-10150, 10400-10500, and 10600 (chart).
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