By Lawrence G. McMillan
The S&P 500 index is trying to put a short-term bottom in place, and it looks like it might succeed.
Still, this would not be the end of the bear market, in my opinion. I say that because the S&P /zigman2/quotes/210599714/realtime SPX +1.06% chart is still in a downtrend. There were new lows made this past week, so the pattern of lower highs and lower lows is still intact. By definition, that is a downtrend for SPX. The index would have to climb above resistance at 4300 to even hint at a change of trend.
Meanwhile, a short-term oversold rally is unfolding, which should be able to reach somewhere on the upside between the declining 20-day moving average (4050) and resistance at 4160. The oversold rally in late March, though, far exceeded those norms – rallying all the way to the upper “modified Bollinger Bands.”