The markets are trading slightly lower today. The SPDR S&P 500 ETF (NYSEARCA:SPY) is trading at $125.90, -0.36 (-0.29%). Over the last few days, the market has paused following a massive up move. This is a change of pace from big swings down and up in recent months. This pause and small pull back is known as bullish consolidation. The market actions dictate another stock market jump in the near future. It may start as early as Friday.
All eyes are on the summit in Europe which will take place on Friday. It is interesting how the markets are giving a leading indicator on the possible direction of the move. This up move coming soon could also coordinate with a Santa Clause rally.
Another strong leading indicator seems to be the banks. This is a sector that leads the market and it has been strong of late for the first time in months. Today, JPMorgan Chase & Co. (NYSE:JPM) is trading at $33.44, +0.21 (+0.63%) while the S&P 500 is flat to lower. In addition, Goldman Sachs Group, Inc. (NYSE:GS) has one of the hottest in spirit of bull flags on the daily chart, just waiting to rip higher within the next few days.
Lastly, the Dollar has a classic bear flag formation. The PowerShares DB US Dollar Index Bullish (NYSEARCA:UUP) shows a possible fall in the near future. Since the Dollar trades inverse to the market, a fall would signal a pop in the stock market.
These indicators are all pointing to a move up in the markets.
Gareth Soloway
InTheMoneyStocks
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