The question of the day from a technical perspective is if the stock market is "breaking out" to the upside. If the answer is yes, then we need to assume that the next leg of the current bull market is about to get underway and all dips should be bought. Good times!
However, if we are in for yet another "breakout fake out" then traders need to play the game very differently. No, instead of a "buy high and sell higher" approach, it is usually better to "ride the range" when stocks are stuck in a sideways consolidation phase. In short, this means that traders may be looking to "sell the rips" while waiting for prices to test the lower end of the range.
But before we attempt to come up with an answer, let's take a look at the state of our trend and momentum indicators.
The State of the Trend Indicators
The Trend board indicators are designed to determine the overall technical health of the current stock market trend in terms of the short- and intermediate-term time frames.
The Trend board has scored a perfect 10.0 this week as every single box is green. There are two ways to look at such a reading. First, the bulls will opine that the current state of the trend board means the market is "in gear" and there is more upside to come. On the other hand, given the question of the day, the skeptic in me will note that universally favorable readings on the trend board often lead to pullbacks.
Gun to the head, I'll side with the bull camp here. Sure, stocks have all kinds of issues to deal with and a pullback could occur at any time, for any reason. However, as a long time "trend and momentum ...