Market internals are very strong today and the SPY’s five- and ten-day moving averages are both hooking higher with the intermediate-term downtrend line definitively broken. In addition, new highs participation is also present. This was the type of strength I was hoping to see. That said, this move puts the index well into short-term overbought territory just as it looks to challenge its 20-day moving average above (say $109.30). How the market handles these technicals and the extent of any pullback will tell us just how safe this market is here. Certainly the news-cycle appears more constructive early-on in this holiday shortened week — we’ll see.
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