Charting Market Moves: More Uptrend or Correction?

Stocks moved higher this week to log record-high closes for the Dow Jones Industrial Average (NYSEARCA:DIA) and S&P 500 (NYSEARCA:SPY). The Dow closed at 15464.30, a new record, and near its all time intra-day high of 15,542 reached on May 22, 2013. For the week, the Dow was up 2.2 percent while the S&P 500 added 3 percent to reach another closing record high at 1680.19. The Nasdaq (NYSEARCA:QQQ) gained 3.5 percent for the week.

The rally was largely triggered by Dr. Bernanke’s dovish statements mid-week that loose monetary policy and low interest rates were going to be around for a long time to come.

On My Stock Market Radar

Chart courtesy of StockCharts.com

In the chart of the Dow above, we can see how the recent action has brought the index back near its all time intra-day highs set back in mid May. The average is reaching overbought levels but is in a strong uptrend with strong momentum. Nevertheless, the double top formed earlier by the intra-day highs needs to be smashed for this rally to be confirmed.

Furthermore, the chart of the NYSE Bullish Percent, which indicates the percent of NYSE stocks on “buy” signals, tells us that the Dow is now in bear correction mode.

Chart courtesy of StockCharts.com