Recent Selling looks nearly complete; Expecting rally back above SPX 4850

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

Technically, our recent three-day selloff likely marks an attractive opportunity following the huge run-up into late December.  SPX lost nearly 90 points from its late December peaks, yet technically, trends have not shown any technical damage, and SPX looks to be bottoming just above former lows from 12/20/23.  Russell 2000 along with the entire Technology sector look to be at support, while the Healthcare sector has achieved a meaningful relative breakout.  Bottom line, a push back to test and exceed the peaks from December 2023 is likely.

A few key positives are now in place following the minor three-day decline that I believe make SPX more attractive than it was heading into Year-end.  Specifically:

-RSI is no longer overbought on daily nor weekly timeframes on SPY and QQQ.

-Key SPX constituent sectors like Healthcare have just achieved relative breakouts vs SPX

-Technology’s pullback failed to do any damage to its relative chart vs. SPX

Overall, given that negative momentum divergence had begun to creep back onto daily charts of SPX and QQQ following the run-up into late December, the recent selloff looks appealing from a risk/reward perspective.  Optimism has also reappeared in recent weeks, and as dis...
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