After sixteen months of a relentless bull market, stock fund managers have learned the lesson: when stocks decline go in and buy.
The hourly S&P 500 (SPX) chart courtesy of Trading View illustrates the recent action.
The SPX move up from the 07/19/21 bottom is the fastest and farthest rally since the move from the correction bottom made on 05/19/21. The move up from the 05/19/21 bottom was the kickoff of a multi- week rally into the July peak. A case could be made that the current rally is the kickoff of a new multi- week rally. Internal momentum argues strongly against this theory.
The daily SPX Bullish Percentage chart ($BPSPX) courtesy of StockCharts.com illustrates internal momentum.
Internal momentum which has been weakening for several months continues to be bearish.
Traders are holding 100% short non – leveraged SPX related funds from the open of the SPX session on 07/12/21. Continue holding short.