What looked like it would be a bounce at the 50-day moving average has turned into a run into higher ground for the year on the S&P 500.
If it don’t sell it rallies.
Now is not the time to play shorts.
Wait for more convincing reversal action – like a blow off top…
Big move up, low volume.
We still say this market looks like it’s tired and wants to sell.
Market tops can take time to form. It’s not like a switch that suddenly turns.
Often it takes a few moves to shake out the confidence of shorts before things move south.
Our short bias is backed by weakness in the Semiconductors, which have led the sell-off for three weeks and are more convincingly under their 50-day moving averages.
We’ve also seen a dominance of selling volume across all the indexes in recent weeks.