Market Outlook™ – 02/06/19
With extremely light trading volume and trading range, the S&P 500® finished lower for sixth time since January 3 (23 total trading sessions). Not surprisingly, the momentum and near-term lines came down. In fact, the oversold momentum line combined with the strong bullish intermediate posture signals a bullish intermediate confirmation signal. The pattern is stronger when the near-term line has dropped below the chart’s midpoint and is setting itself up for a potential bullish near-term low (low between the 20th and 50th percentiles that corresponds to a higher low on the index itself). But, the near-term line stayed deep inside the upper-reversal zone. This suggests there may be more room to the downside before it completes any near-term pullback. All the major indexes are showing the same pattern on their respective Market Forecast charts: strong bullish posture with slightly weaker short-term sentiment.