First, the RUT was down over 1% today, giving back nearly all of yesterday's gain. This created a 'railroad tracks' pattern on the chart. Also, Tuesday I mentioned that the Market Sentiment on the SPX was approaching an overbought area (above 80). The RUT already has attained that level and is flattening. Besides this, the green line of the Market Forecast is sloping down and below the 80 mark. This is a slightly bearish reading for the market.
Second, intermarket analysis shows some headwinds for equities. Gold (GLD) and long term US treasuries (TLT) - both risk-off trades that run counter to equity markets - spiked today. TLT had its best day in 6 months! Without going to deep into the analysis of the charts, they both show nice rounding bottoms and the Market Sentiment is ready for a bullish run. In fact, the Market Forecast for both GLD and TLT have recently turned bullish. The USD fell sharply today, also, and broke distinctively below its 30-day MA. Its Market Sentiment line is now falling from very high levels, which signifies a trend change in the USD is happening.
