while it is possible that S&P could continue to drift higher as trading sentiment remains strong, return of overbought conditions on an intraday basis might put a cap on the upside. As for strategy, we’d look to reduce upside exposure into short-term rallies as we believe market vulnerable to some downside retracement over the medium-term
trading behavior in the S&P remains constrained by a short-term sideways pattern and shown little evidence of a sustainable change in trend. Although, we would reclassify it as something stronger if we see a more constructive pattern on the S&P chart.
based upon recent trading action, an important near-term low had been established and the S&P index is in an early stage of a snap back bounce. Our near-term work on momentum and price structure suggested that the relief rally can be sustained for a few days, potentially allowing for a test of 2600 before a significant pullback unfolds
Friday’s decline led to a serious breach of several supports. The breakdown breakout would be confirmed on another close below 2600, which would support near-term downside follow-through and a test of more important support in the 2530-2515 zone