Don’t look now friends but the market staged a late day reversal in the face of very good earnings reports today. As evidenced in the article by Midnight Trader the market turned from up all day to a large drop in the last hour.
If you look at the chart, the S&P 500 is still in an uptrend but we are up 20% in the last 3 months and 10% in the last month. The MACD is getting ready to cross down and the RSI is coming down from an overbought position.
I think we are at least looking at a pullback over the next week to get back to normal, but where we go after that is unknown. This should be a short term pullback to the 50 day moving average, but given the extreme run up we could see a larger pullback. Brett Steenbarger at TraderFeed is seeing some reversal formations forming in several stocks also.
Happy Trading!
