Given all the chances to break down, the equity indexes are holding above support, taking all the punches landed by the bears. The markets are still standing, which tells us when the punching is over we could see the bulls turn the tables.
Yet, there is something amiss that we just cannot put our finger on. Earnings have been moderately good but the outlook mostly appears gloomy. But since the start of 2023 we've seen the internals of the market turn and remain positive.
That's good news, since we have seen buyers step in most days when it appeared the stock market was heading lower. These "dip buyers" are relentless and fearless -- just recently several large moves lower were bought with vigor. That's certainly a change in character from 2022. We'll see if it lasts.
As for the chart of the S&P 500, Moving Average Convergence Divergence (MACD) remains on a buy signal (pane 2). We still have the channel in the top pane for a bit longer, and we'll seek to find new parameters if price breaks out over the 4100 level. That remains a sticking point; sellers have taken advantage each time to unload stocks around this area.
The Relative Strength Index (RSI) may be rolling over (pane 3) but we need to see if the downtrend line holds as support.
All in all, the price action is showing us a pause in prices, and the lows are being established before a possible run higher, but 4200 early this month was too hot to handle. We could certainly correct during the last couple weeks of February and not ruin the uptrend.