Stock are retesting their recent lows. The market has been going sideways since November and will probably chose a direction soon, up or down. As time passes by and my indicators line up in bottom territory the odds increase that the next move will be to the upside again. Let’s have a look at the S&P 500 (click image to enlarge it):
The 2000 level has become an important base support. If it gives way then the S&P 500 will probably trade down to 1900 very quickly. It is too early to discard that scenario, but eventually a rally will start in the ongoing absence of a real break down. We remain in a lunar green period and all my indicators have fallen to low levels from which a move higher can be started.
We just wait and see which way it goes. It looks increasingly likely a rally is up next, but there is still 30% chance for a deeper pullback first.