Mid-week market update: My former Merrill Lynch colleague Fred Meissner of The Fred Report wrote on the weekend that "the yearend rally has started, and a trend following indicator...we primarily use for risk management to show that trends have turned positive on key indexes". From a purely technical perspective, I agree. The S&P 500 has begun an upper Bollinger Band ride. Past upper BB ride episodes has seen the index advance further, followed by a period of consolidation and mild pullback.
Is the pause in the advance in stock prices the end of the upper BB ride that signals an imminent pullback and consolidation? In the short run, there are three sources of volatility for the stock market. We just had the Fed decision today. This week, we will see several Magnificent 7 stocks report earnings. In addition, the market will see the results of the Trump-Xi meeting.
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