Today’s bear trap might be enough to fuel the next leg up in stocks. The close was telling, and the breadth was off today. That means that while advance/decline was down, the selling didn’t match the pitch of market direction. Money managers aren’t in a position to sell here, which is why they’re telling you to be the one to sell stocks.
Pain trade here is a gap up, and that sets us up to work off this measured move in the $SPX. Dow and Nasdaq have the same pattern here, but the $RUT hasn’t confirmed this pattern yet. Downside risk is a retest of rising resistance. Dow/SPX downside is limited, Nasdaq a little more extreme. The upside targets are more significant in $RUT/$COMPQ.
It should be noted that the $NYMO hit relative OS today. -60 in a grind is as good as it gets.
The chase starts soon.