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SPX and $QQQ- The near-term trend turned bearish on Tuesday’s break;  However, short-term trading lows might materialize by end of week.  Tuesday’s decline looked important and negative for US indices given the breakdown in prices to multi-day lows.  This directly coincided with negative breadth of around 5/1 and witnessed greater than 2% declines in sectors like Financials, Discretionary, Energy, Technology and Materials.

While it’s still quite difficult to rule out a move back to new monthly highs into early May, I suspect that the next 2-3 trading days might very well be down ahead of any stabilization.

While short-term breadth indicators flashed warning signs last week and Defensive trading has been steadily on the rise in recent weeks, along with bullish sentiment, there was scant evidence of any real technical deterioration until today, Tuesday 4/25.

Overall, I cannot make a strong case of a decline straight lower in the weeks to come.  I suspect this will prove to be a difficult road for both Bulls and Bears alike.  Ideally, until/unless 4040 is broken, recent weakness likely should prove buyable by Thursday/Friday for a push back into early May.

It’s worth noting that April has turned out ...

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