A shallow pullback?

Mid-week technical update: I wrote on the weekend that I expect that the stock market would continue to rise on an intermediate term basis, but some short-term weakness was likely (see A repeat of the failed Oct/Nov rally of 2015?). What I did not expect was to see a short-term buy signal after the brief weakness that we saw today (Wednesday).

In retrospect, it was easy to see that a pullback was coming. This hourly chart of the SPX shows negative divergences on RSI-5 and RSI-14, which set up the conditions for the fall in prices.

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