Stocks were mostly at a standstill on Monday as traders held back prior to congressional testimony by Fed Chairman Ben Bernanke this week, while some financial stocks did manage to drift higher on the session. As beauty is in the eye of the beholder, so too is the interpretation of the light volume to technical analysts. On the one hand we can view it as a digesting of recent gains acting as the pause that refreshes. On the other hand we could say the absence of buyers could lead to increased confidence for the bears to apply pressure. Many stocks have a stochastic oscillator reading that is getting overbought. Let's take a look at the charts:
The OIH which represents an undivided beneficial ownership in the common stock of a group of specified companies that, among other things, provide drilling, well-site management, and related products and services for the oil service industry, saw a slight uptick in volume on its minor reversal. The green support area did hold but the stochastic lines are above 80 and look to be crossing. Keep an eye on support.
The XLF Financial Index was a bright spot seeing prices poke above the 100 day simple moving average on fair volume.
In summary, even as many traders are expecting a pullback or downright sell off, the market has been resilient and continues to surprise to the upside. Charts suggest we could see some consolidating or pullback action soon, the Ben Bernanke testimony will probably determine to what extent this does or does not occur.