The pullback brought the index back to just about flat for the year while the Dow is up nearly 100 bps in 2016 and the NASDAQ and Russell 2000 continue to toil in the red.
- The S&P sold off as it ran into trendline resistance.
- RSI working off overbought conditions
- Negative Divergence in Stochastic and Breadth (% of stocks Above 10 and 20 day ma)
- Our indicators show that buying breadth peaked in early March but since then there has also been a huge lack of selling
- Europe and Japan remain in downtrends
- However with the 4% rally in Italy on Friday it shows that global markets are still hostage to government intervention and central bank speak
- Italy rallied on reports of a bad bank fund being introduced
- Big up move in the Yen which is a risk off bet
- The VIX term structure is coming off areas associated with flat to down markets going forward