Zweig Breadth Thrust and 4wk New High/Low Ratio backed off a bit today to 58.67 & 89.02, respectively. This may buy the rally a couple more days but if we were to rally hard Thursday or Friday then these would push into extreme overbought levels and then you better start getting paranoid. But we are not there yet and may not get there this week.
Cumulative Volume Index rose today while the $NYA fell a few points in a sign of Positive Divergence. This doesn’t happen often and Positive Divergence is supposed to be a good thing, right? Yeah, well, the last time this happened was on October 28th, which was a Friday,when $NYA lost about 10pts. In the next session, Monday, October 31st, $SPX dropped 31pts. The difference between 10/28 and now is that the markets had gone into extreme overbought territory. Interesting that on 10/28 $SPX rose by 0.49pts and today $SPX rose by a whopping 0.40pts. OMG. (Theme from Twilight Zone should be running through your head about now.)
$SPX chart and still looks good. Holding above all key MA’s and trend lines and the 20MA is about to cross up through the 200MA. Dragonfly doji today but we saw one of those last week and it just indicated indecision. A close tomorrow below today’s low of 1285.41 would confirm bearish implications of this candle. But until then it’s just a candle.