Current Stock Market forming a cup
Will there be a handle? Looks that way doesn’t it. The pattern is nicely complete with a nice cup formed over 2 months. First the downside of the cup that touched the 200 day moving average and than a slight bounce and the formation of the right side of the cup shaped pattern. Given below is a daily chart on SPX complete with a cup shaped pattern. This is a bullish chart pattern and that usually leads to higher prices to come.
What may happen is that the market may take a breather and form a handle or if the bulls came in strong it can blast off without the handle. There is one wrinkle in all of this. The cup was formed after a market decline and not ascent. Here is a quick video
Most of the stocks have also formed these cups and are clearing their bases or chart patterns with buy points right and left. NFLX cleared its buypoint yesterday with heavy duty volumes. Most of these leaders have late stage bases, bases that are formed after 3 to 4 bases and they are prone to weaknesses in the patterns.