Large Caps Lead S&P Rally

This is a great way to end a two-week period of wild gyrations which shook out a lot of weaker hands.

The S&P 500 rallied after forming a reverse head and shoulders formation, which is one of my favorite formations and overwhelmingly bullish.

Leadership is still with large caps. Part of the problem with growth stocks is weakness in Communication Services (XLC) because of Facebook (FB), and to a lesser extent other names that could be facing regulatory scrutiny.

Earnings shifted away from financials. Next week we will hear more about supply chain issues, etc.

Now that the S&P 500 is back above its 50-day moving average, the next test is forming and breaking out through a double top.