With very light trading volume (even for a half-day session), the S&P 500® fell for the third time in 4 trading sessions this week. In fact, the S&P closed with its lowest closing level during the decline, surpassing the closing but not intraday low on October 29. All four lines, including long-term Market Sentiment, are falling. The intermediate line is close to the lower reversal zone again for the third time since early October. Short-term sentiment is strongly oversold but be wary of light volume moves that swing too far in one direction. They tend to reverse once normal volume and participation re-emerges. The near-term lines for the NASDAQ Composite and Russell 2000® are rising. The Russell’s short-term line crossed back above the chart’s midpoint after forming a similar bullish near-term divergences that all the major indexes are showing. The small-cap index is starting to show some relative strength versus large-cap stocks, which is a positive sign for a renewed long-term bullish trend. Of course, any bullish move higher may just be a return move with the major indexes also all showing “death crosses” on their popular long-term moving averages.

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