Bulls stepped back on mid-week following a not-so-great earnings report at Target (TGT), states Jon Markman, editor of Strategic Advantage.
Worries about consumer spending during the holiday season ultimately sent the S&P 500 (SPX) back to 3,958, a closing loss of 0.8%. A pattern is emerging. It’s one day up, another down, then repeat.
This churning is typical of consolidation following big moves. Bulls should not be too concerned. Bears ought to ultimately concede a rally for the benchmark S&P 500 back to the 200-day moving average at 4,073, an advance of 2.9% from current levels.
The price action during the past three days for financial, industrial, and semiconductor issues has been modest. Bulls appear to be biding their time, waiting for the yearend advance to resume.
Even retail stocks have behaved well, despite the dire forecast Wednesday morning from executives at Target. There is an important support for the benchmark at 3,900. A pullback to that level should re-energize bulls.
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