In NFTRH 472 we noted sentiment and indicator risks to this über büllish market. On Wednesday morning in a pre-market update we noted the extreme overbought condition after Dow and SPX put in ‘outside day’ daily chart candles.
And then… drum roll for dramatic buildup… THE MARKET TANKED A WHOPPING 1%!!! from high to low. The thing is, short-term sentiment got disproportionately reset on this little micro blip with the VIX spiking +35% at one point and other sentiment indicators backing off of briskly over bullish readings.
So, while it’s certainly not in the bag, what happened with sentiment increased the odds that the market may not do the right thing and take a healthy yet moderate correction to the 50 day averages but instead, turn out to be on yet another micro blip that cleans it out for more momentum.
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