Price Action
[bullish]
Volatility continues to decrease on multiple time-frames (C). The market remains overbought on intermediate-term levels, that can be seen as slightly bullish (B/D/E). The expected opening GAP of more than 0.75% provides a bullish edge especially in current trend and volatility conditions (F-H)..
Seasonality
[bearish]
Seasonality is very bearish for week 3 (I)..
Breadth
[positive]
Market Breadth (J) signals a good up-trend on two time-frames (mid-term / short-term).
Sectors
[positive]
Sector leadership (K) is beginning to improve. XLI (Industrials) and XLV (Healthcare) have taken the lead, that can be considered as slightly bullish..
Bonds
[positive]
The bond market (L) remains defensive though it’s beginning to improve as well..
Outlook
I expect a positive week as we are seeing an improvement on all levels. Due to week 3 performance we might have an opportunity to get a lower entry than Monday’s opening GAP.
