Second Day Indecision
We had a rare scenario when the #sectorbreadth analysis for the S&P touched the 90% territory of overboughtness. Not surprising, today's action started to see some easing off highs, although today's set of candlesticks has more in common with a neutral set up - so bulls are reluctant to give up this rally.
The lead index - the Russell 2000 - after pushing above its 200-day MA earlier in the week, sellers had managed to push the index back below its 200-day MA. Despite this loss, technicals remained net bullish.
The Nasdaq similarly reversed, but did so before it made it to its 200-day MA. The two doji of today and yesterday appeared in a no-mans land between 50-day and 200-day MAs and there is plenty of room to support; the first such test is likely to be its 20-day MA. Expect further losses, but nothing likely to rate as a 'sell'.
The S&P reversed on the test of its 200-day MA in a modest move lower. Technicals are net positive, with On-Balance-Volume managing to return a 'buy' trigger despite the selling. I would be looking for a test of the June swing high (then resistance - now support).
For the remainder of the week, look for moves to test the former swing highs of May/June. The selling over the last couple of days has been modest and ideally we would want this to continue into support tests.
You've now read my opinion, next read Douglas' blog.
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