Market Outlook – 05/22/18 – Brandon Van Zee
The S&P 500® fell 0.31% today. While the total amount of the pullback isn’t viewed as significant, how it occurred causes a bit more concern due to the fact that it ended with a bearish engulfing candlestick pattern. The intermediate posture remains strongly bullish. Short-term sentiment soured as the momentum line fell into the lower reversal zone. The combination of those two things does create a bullish intermediate confirmation signal. However, ideally traders are also looking for the near-term line to be positioned between the 20th and 50th percentiles on those signals, which is not the case for the S&P 500 today. All four major U.S. equity indices have bullish intermediate confirmation signals, with the NASDAQ® and Russell 2000® showing the enhanced signals.
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