Submitted by Lance Roberts via STA Wealth ManagementLast week, I stated the market was approaching a fairly important decision point. To wit:
“As shown in the chart below, the market has been remained trapped in a tightening pattern of higher lows and lower highers. This type of action is like the compression of spring. In the next few days, the markets will make an important decision. A breakout to the upside of this consolidation will confirm the current bullish trend, and portfolio actions should remain allocated and tilted more heavily towards equity related risk. However, a break to the downside will likely suggest a more significant correction in the near term. It is worth noting that this consolidation in the market is happening during a decline of relative strength. This is a warning sign that generally bodes poorly for the bulls.”
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