S&P's Rally Overstretched

the daily chart of the S&P looks overstretched on the upside following recent rally. This might negatively affect trading sentiment in the coming days but we’d view resulting weakness as an opportunity to add upside exposure

S&P's Upside to be limited by Overbought Conditions - P2

S&P is in a holding pattern as traders wondered whether more gain is warranted given the massive advance over the past months. With Money Flow measure above the zero line, the path with least resistance remains higher. On balance, we remain bullish on the S&P and looking to buy into market dips

S&P's Upside to be limited by Overbought Conditions - P1

S&P tested and held key support. While there seems to be room to go higher, traders must be mindful that the return of overbought conditions on the daily chart. While overbought condition is normal during a pro-long uptrend, it’s suggested that upside momentum might not sustain without at least a short-term breather. With this in mind we’d consider increase exposure into short-term dips rather than chasing breakouts

S&P Shifted to Consolidation Mode

an overbought pullback consolidation interrupted the early January massive rally in the S&P. Although seemingly vulnerable to further short-term weakness, the overall technical backdrop remains positive so sell-off should be shallow because the sideline money will try to fight its way back into the market

Traders Committed To Take S&P Up To 2800

S&P could continue to drift higher as trading sentiment remains strong. Our near-term work on momentum and price structure suggested that short-term overbought conditions can be sustained for a few days, potentially allowing for a test of 2800 before a significant pullback unfolds

Market had Finally Reacted to Overbought Conditions

S&P developed a high volatility with fast up and down moves between 2740 and 2760. While there is a low probability of a full blow correction we expect increase in near-term volatility as markets digest overbought conditions


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