Here's a chart of the SPY
The market has been moving sideways since early may. For the last few trading sessions it's been trading right around the 10 day SMA. It's also approaching the trend line that started after the China sell-off. From a volume perspective, we had fairly aggressive selling on Thursday, but volume has backed-off to more normal levels for the last two sessions. From a technical perspective, the market is at a crossroads.
Here's a chart of the QQQQs
The analysis for the SPYs applies here, save for the volume analysis. Notice volume spiked up on Thursday and has risen a touch since then.
Finally, here are the IWNs
This average hasn't been able to get over the highs it reached before the China sell-off. This may indicate traders are moving into larger more established names during the current rally. This average is also approaching the trend line established at the bottom of the China sell-off.
All of these averages are at or near their trend lines. That makes tomorrow's inflation report that much more important. Traders are looking for a reason for the Fed to lower rates -- or at least give them an argument that the Fed can lower rates. Any number that supports that thesis should rally the markets.
