Under The Surface, Bullishness Is Eroding

My Swing Trading Approach

The divergences are becoming extremely obvious here, especially as it pertains to the T2108 indicator. That means caution is very much warranted here. I plan to play it safe, and protect existing profits, and likely hold off on any new positions unless the market changes its tune.

Indicators

Volatility Index (VIX) - Another day of nothingness. Hasn't done anything in about three weeks - just sideways chop.
T2108 (% of stocks trading above their 40-day moving average): Yup, another 3.5% loss on this indicator - down three straight days to 53% while the market has traded higher in two of the last three days.
Moving averages (SPX): Broke above the 5-day moving average, tested and held.

Sectors to Watch Today

Materials and Energy represented the bulk of the market's gains. The former kept from breaking down on its daily chart, while the latter showing a glimmer of hope with an inverse head and shoulders pattern. Staples continues to consolidate with no clear edge. Healthcare and Technology both had false breakouts, and Discretionary may be attempting a lower-high on its chart.

My Market Sentiment

Yesterday was a brutish day for stocks. Momentum and small caps were hammered, while Materials and Energy led the way. Traditionally bullish sectors saw heavy profit taking. Breadth was dismal, and negative. Under the surface, bullishness is eroding, while yet to show in the indices.

S&P 500 Technical Analysis