The mean-reverter in me is having flash backs to July of last summer. The technical parallels are fairly significant. In both cases, price tagged major support on the second leg of a "w" bottom, which then prompted sustained moves higher with only minor pauses along the way that flushed out shorts and refreshed the energy of the trade, as follows:
As extended as we are here in time, my point is not that we will see a complete repeat of that epoch -- but rather that -- in as much as we are overdue at least a minor retrace, this move could have quite a way to go. That's another way of suggesting that I'm not going to get too over-committed one way or the other until that next leg reveals itself.
Since the NASDAQ and Russell have already put in their second legs higher, perhaps a non-confirmation by those more motivated indexes will be the signal to be more aggressive with shorts. Either way, there should be ample time to observe in the S&P: 1) multi-day price resistance/ range flattening; and 2) increasing noise and divergences among short-term measures.
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