S&P 500 showed a new weak bearish intermediate posture due to today’s break below short-term support levels. Due to the market’s bounce at the end of the day, both short-term sentiment lines pushed higher. In fact, the near-term line for the Russell 2000® finished near the chart’s midpoint. The Dow Jones Industrial Average’s intermediate line dropped slightly below the 50th percentile, but the intermediate line has been fluctuating around the neutral area for the past month. Today’s breakout of a coiling pattern suggests there may be more downside. On the other hand, the intermediate trends for the NASDAQ Composite and Russell 2000® remain strongly bullish. All the major indexes can still form higher near-term lows compared to the previous bottom from a couple of weeks ago. The odds of a new higher near-term high on the next run are falling because of how much the current pullback has dropped. We are currently in a period of higher volatility compared to what we’ve become accustomed to last year.
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