One of the main indicators I follow is breadth, and while it’s been very good of late there are signs the market could be due for a pullback. I’m not going to judge this most recent rally off the 1812 area on the SPX, but the quality of it has been quite good as it relates to the various indicators I follow.
However, with the oscillators in nosebleed territory we have to be ready for the market to reverse sharply at any point. Does there have to be a catalyst? Of course not, but any excuse will work (jobs report?). This week has been quite bold, many reasons for the markets to fail but the bulls have picked up the pieces. A week ago we witnessed a sudden change in character, the markets dropped early and rallied all day long – the first time that happened in 2016.
For now, we’ll keep one hand on the door just in case — knowing full well any correction or pullback is going to induce some panic, worry and fretting. But this time, it may be all for naught!
