Short-term trend (DAILY CHART) – BULLISH: Last week, SPX rallied from 4405 to 4515, a strong 110-point rally. SPX reversed direction mid-week and is now back above its 50-day MA, a bullish development. We're not surprised since the market had become slightly overbought. As expected, the "market," fueled by the algos, interpreted the Fed chairman's comments as positive last Friday. Note: On Tuesday morning: Futures are FLAT.

Long-term trend (WEEKLY CHART) – BULLISH. The weekly chart looks strong, as SPX and the other indexes reversed direction and rallied well above its major moving averages.

MACD (DAILY) = NEUTRAL. MACD is above the 9-day signal line but slightly below the zero line. On the positive side, MACD is pointing higher, following the overall market direction.

RSI: (S&P 500) = 58.14 (DAILY) FIRMLY OVERBOUGHT. RSI was slightly overbought last week but with the current rally, RSI is now firmly overbought. It's too early to make any bold predictions based on RSI at this time, but watch for extreme moves.

Comment: SPX and the other indexes were looking at the abyss a couple of weeks ago but like magic, SPX was pulled higher by the algos, reversing the downtrend. As mentioned earlier, the market has switched from slightly overbought to overbought.

From a technical perspective, because the trend reversed, it's possible the July highs will be taken out. There are no guarantees, of course, but it's possible. The trend is certainly in an uptrend right now. (Ironically, the economic news wasn't spectacular, which was bullish in the wacky world of Wall Street. The weaker the economy, the more likely the Fed will stop raising rates.)

Speaking of Fed Chair Powell, he hinted that raising interest rates may come to an end, so the market rallied. It's also possible we will have a year end rally, but always be on guard as nothing is guaranteed. And don't forget that September is usually the weakest month for equities (and as the joke goes, so is October, November, December, etc.)