the near-term technical backdrop still favors the bullish case hence further short-term gains likely. Although, given that there are some potential sell signals building on the horizon, we’d remain skeptical of breakouts and looking to get off the overcrowded bullish bandwagon.

the market is now turned indecisive just below key resistance at the 1150 level on the S&P 500 index following last week’s massive advance. While the near-term technical outlook is currently tilted toward the bearish case, a single trading session doesn’t form a trend so this is not a call for a major top, rather it’s a warning signal, a sign in which the market is telling us that it’s ready for a pause.

while Monday’s upside breakout had helped opening up for a test of January high, around the 1150 level on the S&P 500 index, the negative divergence on the Money Flow measure warns that the market could be in final stage of the present rally. So traders need to be careful about buying stocks and need to get some downside protections for those that have already been bought.

the February trendline has been tested and respected over the last three trading sessions. This bullish technical setup is opening up for a retest of last week high at the 1112 area on the S&P 500 index, then all the way to 1130-1150.

market is currently undergoing a short-term overbought correction. Although seemingly vulnerable to further pullback consolidations, the near-term outlook remains bullish as long as the S&P holds above the February trendline support, currently at 1085. With that said, until proven otherwise, pullbacks should be considered as buying opportunities rather than chances to take profits and get out.