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In all, the correction from the early June highs to the lows of this week was about 5%. That was enough to at least temporarily remove the "bullish" designation from the $SPX chart. The Index has now fallen below its 20-day moving average, and there is resistance in the 7500-7520 area. A rise back above that area might be enough to restore the bullish scenario, but for the now the index is in a short-term negative trend.
This market is the epitome of our phrase, "overbought does not mean sell." It just keeps going higher, and now the rally has broadened enough so that the Dow ($DJX; DIA), NASDAQ-100 ($NDX; QQQ) and Russell 2000 ($RUT; IWM) are all doing the same. All of these indices, including $SPX, have made new all- time closing and intraday highs this week.
