Market Picks up Dropped Shoe

The month of market looks to have turned out to be just another bump in the road on the climb, which started last summer. The market’s reaction to the FOMC minutes yesterday afternoon confirmed the failed bear flag.

Instead of dropping the other shoe, the market went ahead and put back on the shoe that it had lost.

Take a look at the financials sector (XLF), which is the sector that led the march up the hill over the past six or seven months.



Not only did it fail to break down, carving out a double bottom pattern on its daily chart, but it has now confirmed that double bottom on a high volume breakout. When market leaders lead the way higher, the trend is healthy. This trend has certainly reasserted itself.