{"id":19296,"date":"2022-01-10T07:30:41","date_gmt":"2022-01-10T12:30:41","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=19296"},"modified":"2022-01-10T07:30:41","modified_gmt":"2022-01-10T12:30:41","slug":"this-week-looks-bullish-for-the-market","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/this-week-looks-bullish-for-the-market\/","title":{"rendered":"This Week Looks Bullish for the Market"},"content":{"rendered":"

The talking heads are all bearish<\/a> again.<\/p>\n

That means the stock market is likely headed higher this week.<\/p>\n

Of course, it’s tough to be bullish<\/a> on stocks right here – especially considering the drubbing most stocks took last week. The S&P 500 lost nearly 2%, the Russell 2000 dropped almost 3%, and the technology-heavy Nasdaq Composite Index got slammed by 4.5%.<\/p>\n

It was an ugly way to start the year. And, that ugliness caused a lot of stock market bulls to rush over to the bear camp…<\/p>\n

No matter what financial television station you turned to on Friday, the talking heads were bearish. Many of them predicted that last week’s selloff was the start of a 7% to 15% correction in the stock market.<\/p>\n

Maybe that’s true… Heaven knows the major stock indexes have been running hotter and higher for so long that we’re overdue for a meaningful pullback.<\/p>\n

But, whenever so many analysts get so bearish so quickly, it almost always leads to a sharp, oversold bounce. And, that’s what I expect we’ll see this week.<\/p>\n

Take a look at this chart of the S&P 500…<\/p>\n

\"\"<\/p>\n

(Click here to expand image)<\/a><\/p>\n

The index closed Friday right on the support<\/a> of its blue 50-day moving average<\/a> (MA) line.<\/p>\n

The last two times the S&P challenged this support level, the index bounced off of it with a strong, one-week rally. Similar action this time around could have the S&P back up near all-time highs by the end of this week.<\/p>\n\n\n\n
\n

Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Another argument in favor of a short-term oversold bounce is the “positive divergence” on the 15-minute chart of the S&P 500.<\/p>\n

Take a look at the chart…<\/p>\n

\"\"<\/p>\n

(Click here to expand image)<\/a><\/p>\n

As the index dropped to a lower low on Friday, the Moving Average Convergence Divergence (MACD)<\/a> and the Relative Strength Index (RSI)<\/a> momentum indicators at the bottom of the chart were making higher lows.<\/p>\n

This sort of positive divergence tells us the momentum of the decline is fading. It’s often an early warning sign of a potential rally.<\/p>\n

Patterns on a 15-minute chart tend to play out within just a couple of days.<\/p>\n

So, if stocks are due for an oversold bounce on the basis of this chart setup, then the stock market should be higher within just a few days.<\/p>\n

Granted, the talking heads may be proven right a few weeks from now. Last week’s action was damaging to the stock market. And, we could indeed be on the verge of a stronger correction.<\/p>\n

But, big declines don’t usually happen when everyone is looking for them. And, given the potentially bullish setup in the intraday charts, I suspect we’ll likely see a bounce this week.<\/p>\n

Traders should use and decline today as a chance to buy in anticipation of at least a short-term bounce.<\/p>\n

Best regards and good trading,<\/p>\n

<\/p>\n

Jeff Clark<\/p>\n

Reader Mailbag<\/strong><\/h2>\n

Do you see a market correction happening soon, or will it keep going higher?<\/p>\n

Let us know your thoughts – and any questions you may have – at feedback@jeffclarktrader.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

We could be on the verge of a strong correction…<\/p>\n","protected":false},"author":25,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-19296","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/19296","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=19296"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/19296\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=19296"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=19296"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=19296"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=19296"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=19296"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=19296"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=19296"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}