NYSI/Cumulative breadth is still pointing down:
The daily chart shows signs of being "oversold" but is unreliable:
And the weekly chart is only 3 weeks into a "sell" signal. Sell signals on a weekly basis almost always last longer than 3 weeks. Sometimes much longer:
Sentiment is falling into line exactly as expected. There continues to be an increase in put buying, and public sentiment gauges are showing a persistent tilt to the bearish camp. All of this is conducive to the cleansing out period we are in, and is setting the stage for a nice rally/recovery. Perhaphs a real "summer rally"?
In the meantime, there is enough energy stored up in the decline to support a bounce at any moment. The daily and weekly both suggest resistance at the 1412 to 1414 level. I still expect any further sinking into this slush should be limited to the 1325 area, while any sudden collapse to 1275 would be a spectacular buying opportunity.
Good luck in your trading this week. Remember what Baruch said, "Buy straw hats in the winter, for surely spring will come"
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