The primary market indexes, DIA, SPY, QQQ, and IWM all closed higher on Friday, but the modern family is hinting that the market may need a rest very soon.

When you review the descriptions of the condition of the major sector and asset class ETF at the end of this article you’ll find the word ‘doji’ appears more often than usual. Perhaps this shouldn’t come as a surprise considering grandad IWM has a doji pattern too.
The ‘doji’ pattern (open and close at the same price) means “indecision”, and when it comes after a multi-day run it can often indicate the market needs to rest or even reverse.

Additionally, the “inside day” pattern appears quite frequently in the descriptions of the sectors below. The inside day is pattern where the current day’s range is completely within, ‘inside’, the prior day’s range. This can have the same effect on an extended trend as the doji.
Furthermore…youngest brother, SMH, just narrowly averted the dreaded label of “key reversal” on Friday! SMH has been a market leader since the summer, but it took beating from Trump’s election.

Like a good leader, SMH bounced right back to new highs, but on Friday’s its weak action on a strong market day, suggests that the beating may take longer than a week to heal.

Fortunately, with so many new good looking market leading sectors, the bull market doesn’t need SMH to tow the line any more.
However, when you add up all the doji’s, inside days, and SMH’s action, it’s not the same picture you see in the DIA, SPY or even the 5th day in row that the IWM closed over its prior day’s high (not just higher, but over the prior day’s high!).

This Wednesday the Fed will, presumably raise the Fed Funds rate an insignificant amount.

More importantly it will also hold a press conference in which the market will get a chance to react to what it thinks the Fed is likely to next.