The video in this report is only accessible to members
The video in this report is only accessible to members

Technically, the near-term pattern remains stretched to the upside and it’s hard to yet declare that Wednesday’s quick decline was just a one-day event.  Pullbacks into Friday of this week and/or next Tuesday (post the Christmas holiday) likely should prove buyable for a move back to exceed SPX 4818.   Overall, movement back over Wednesday’s highs is needed before thinking the “coast is clear”

It remains difficult to say with any certainty that Wednesday’s late day decline was just a one-day affair and markets should push immediately back to new highs.  While the short-term momentum gauges certainly did reach oversold conditions, this was part of an overall picture following daily momentum having reached the most overbought levels in five years.  Overall, while a one-day decline might be helpful to alleviate this to a minor extent, the large rally will still require greater consolidation in my view before thinking much more upside is possible.

It's often difficult to buy dips on bearish reversal days which occur on heavy volume and very negative breadth that undercut several prior days of lows following a runup to the highest overbought daily momentum conditions in five years.&n...

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