Week 32 put in lighter volume trading and formed a doji on the weekly bar, however the more we move sideways here the more of a bullish bias we will take. Sideways action after a vertical move higher forms a bull flag formation (a bullish chart pattern). While, not much has changed from week 31, the sideways action creates a base of support here which if broken to the upside should send stocks higher.

On the weekly chart of the S&P the 50 and 200 Exponential Moving Averages are turning slightly higher. Keep in mind the down trend line across the lower highs of ‘07 and ’08.

We remain at the Fibonacci 38.2% Retracement level on the S&P500 and the NASDAQ is approaching its 50% retracement level. Volume should begin to pick up soon as the summer comes to an end and big money traders come back from holiday.