Today is the second bearish reversal day in this week, and I guess there won’t be a follow-through tomorrow just like the first one on Monday because of the famous The 3rd time is the charm. Albeit the market declined, it is still overbought either the short term or the intermediate term, therefore a pullback is still needed. The financial sector is extremely oversold in the very short-term, so the market may at least bounce back up some time tomorrow and 67% of the chance may close in green according to 7.0.4 Extreme CPC Readings Watch in the case of CPC < 0.8. However, a grand rally seems unlikely to me even the market does close in green.
1.0.4 S&P 500 SPDRs (SPY 15 min). The pattern on the chart looks like a Pennant which is a continuation pattern, so the market may possibly go up further.
5.3.1 Financials Select Sector SPDR (XLF 30 min). Since the ChiOsc is way too low, the price may at least bounce back up in the middle of the day which is bullish to the broad market.
Now let’s check out how overbought the market is.
Number of SPX stocks closed above MA10, courtesy of www.sentimentrader.com.