Stocks Need To Breakout Before They Breakdown

The stock market has fallen flat in recent months. After recovering smartly from the pullback in late January and early February, stocks as measured by the S&P 500 Index have essentially entered into a sideways pattern. Gains have been generated along the way, but they have been hard won and incremental at best as the S&P 500 continues the long battle to overcome the 1900 mark. With many anticipating the onset of the next bear market any day now, investors are understandably wondering whether this recent grind may be the last gasp peak before stocks turn definitively lower. But while it may seem counterintuitive, the languid performance of stocks over the last three months is actually short-term bullish for the market to move decisively in reaching fresh new highs in the coming weeks. What lies beyond any higher peaks, however, may be an entirely different bearish story for investors.

Please click on the link to read more of my article on Seeking Alpha.

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