Stocks Close The Week On A Positive Note

Even though I've been bearish on stocks for the past few months I must admit this week's price action appears to be somewhat bullish. In the above weekly chart of the S&P500 (SPY) you'll note the bullish engulfment pattern that has formed. In fact, all the major indices have bullish engulfments which indicates to me that we may see a rally take place.

For those of you who are not familiar with candlestick charting formations I'll tell you this much, bullish engulfment patterns are reversal formations. The fact that this pattern formed after successfully testing the low from 3 weeks ago increases the probability of a rally in the weeks to come. The bullish pattern will be confirmed if the high of the week (98.57) is take out next week. As always, we'll see what happens.