The broad market, as measured by the Standard & Poor’s 500 Index has had a pretty good week. First, the 1,420 area was overcome, followed by a pullback to slightly below that level.
That pullback held, and two strong upside breakout days followed, with the S&P 500 ($SPX) moving through prior resistance at 1,430. These moves created a short-term overbought condition, which contributed to a market decline today. We expect this decline to be short-lived, as overbought corrections often are. However, if the major support at 1,395-1,400 were to be violated, the picture would take on a bearish tone.
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