Big picture…here is a daily candlestick chart from Jan 2016 through Tuesday, August 15th, 2017:
Note the orange channel lines from the spring of 2016 that have contained the two downside moves in the market in 2016 and how price has been riding along that upper trendline all of 2017? Here is a closer look at the 2017 daily price action in SPY:
The same orange channel is running through the prices of 2017 and the lower orange trendline shows up below near the bottom. There is a channel I have mentioned in the past starting in the spring of 2017 that I have drawn in white and yellow. The recent sell off last week tagged the bottom of that channel again, so it now has 4 touches. Pretty significant in my mind, so a break of that lower trendline could be something to watch for.
One shorter term trading system I use (a Fibonacci system) simply states:”if price breaks up into the $247.50 range, the target of the move is $251.” Time will tell if that is correct, but unless the bottom trendline has a daily close underneath it, I’d say the odds favor a run to $251 once $247.50 is captured on a closing basis.
Yes, last week was interesting and certainly added a little variety from the “always UP” market routine, however nothing of any consequence occurred to change the bullish stance of the market. As the white and yellow channel clearly indicates, we are making higher highs and higher lows. The very definition of an uptrend. Until that changes, we are in a bull market, invest accordingly.