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Is the Pullback Already Over?

The S&P500 reached a low during Monday's session around 1300 and (below our key 1305 level) before starting a comeback later in the session and closed broadly unchanged for the day.

For sure this move is impressive, but what can we see in our indicators?

Advance Decline Index (21days)

We can notice that our Advance Decline Index (21days) remains in sell territory but red and blue lines are very close. This tells us that the current pullback is very weak and either the downtrend accelerates or the bulls will come back very soon and the market will retest its previous high.

trend level (TL) is now at '3' - no more overbought condition

We can notice in the table that the trend level (TL) is now at '3', telling us there is no more overbought condition. So, the market could easily resume its uptrend.

Looking at the Sigma Trend Index (STI) at 7, we can notice that the trend considerably weakened but as long as the STI remains in positive territory, the uptrend remains in place.

Turnover Convergence Divergence

Looking at our turnover index (5days), we can notice that this index is close to a new buy signal


Conclusion:

With a STI still in positive territory and the turnover index (5days) close to a buy signal, we believe the market will (at least) retest its previous high.

Have a nice day,

 

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