Today the market went up again with decreasing volume. The trend in all time frames is still up, however it’s important to check if the market is in distribution or not. At bull’s side, the market is up and there is no sign of trend reversal at the moment. At bear’s side, negative divergence on several technical indicators on SPX daily haven’t been resolved since August, and the rising wedge is still there. On the SPX hourly chart and other intraday charts (see SPY 30min, SPY 15min charts), negative divergence is also significant. The market breadth doesn’t looks so strong especially in the afternoon. The TICK and TRIN indicators were neutral to a little bit bearish, and the end of day action looks bearish. VIX has been up a little from all year low but it’s still oversold. Financials dropped below 15.4 where it broke out last week. Therefore, a pullback in the short term will be expected.
XLF hourly
However, the market outlook in the intermediate term is still promising. The important support level of US dollar is broken and the next support is still far away. Crude oil has got out of the consolidation, the rally is resumed. Major pullback on the gold price seems unlikely at the moment.
US dollar daily
Crude oil daily
Summary: short term the market may have a moderate pullback. However the trend is still up.
