The legend of the daily market width chart says it all. The deterioration is visible and the question remains when the bulls step in. Remember that the bullish percentage index remains solidly in bullish territory (making corrections likely to be bought), and the stock price action hasn’t shown us that it’s ready to roll more seriously however.
Metal with a doctorate. in Economics ($ COPPER) gave up on this week’s gains, but yesterday’s lower node indicates that the bulls have retreated to some extent. This increases the likelihood that once trading leaves this flag it will do so with a higher breakout.
In summary, Yesterday’s S&P 500 session leaves stocks stretched against credit markets, and none of the long-term T-bills are signaling an immediate recovery just yet. Much depends on current debt trading, and I think the worst of the downside is over, and higher prices would follow and help put a floor behind the relatively large S&P 500 versus HYG: SHY .
The same is true for market width indicators for the S&P 500, where I also see stabilization followed by a rise in the lead-down line as the most likely scenario. And that means the bulls approach all trading opportunities better with tight trading parameters (as I have done in many recent sessions), as the air near the all-weather highs in February is pretty thin. .
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