Last week we wrote we were expecting a rally in the area 1335 - 1345.

Yesterday the SPX had a top @ 1334.93.

Following a strong open, we decided to close our long position early in the session at 1329.48 (earning 10.56 pts).

We wanted to open a short position at 1336, but after a intraday double top at 1334.93, we lowered our price and opened our short position at 1334.07.

As we expected, our key indicators are now very close to the zero line:

The Breadth Index is already in positive territory (red line)

Trend Index (STI) remains in negative territory ('-3' vs '-5'):

Conclusion:

With our key indicators around the zero line, and our Trend Level (TL) at '3', we can say that markets aren't anymore oversold. If market internals continue to improve from here, then we will be in presence of a trend reversal rather than in presence of a bounce back.

Current position: short @ 1334.07 (Stop loss @ 1346)

Have a nice day,