Market Headed for a 50-EMA Test
Daily Chart: The S&P recently undercut the October 2021 low; undercuts provide a good opportunity for the market to rally. The S&P held support at its 10SMA Friday, setting up a likely test upward to the 50EMA. Structurally, that move would be a "c" wave in an abc retracement. Since RSI20 fell under 25 (very weak) on the Jan low, we're likely to see a retest downward after the c wave test of the 50 MA. RSI20 is still weak at 39, so remain cautious. Rember, the market can trend upward when RSI20 is above 50, but below 50 the market is too weak. Also, up volume on the current rally attempt has been weak relative to the down volume of the January decline, so bears still have the balance of power advantage (for now). Few stocks show prime setups right now, so be patient.