A possible pause in the uptrend

Mid-week market update: Let me make myself absolutely clear, I remain intermediate term bullish on US equities based on the points I made in past remarks (see Equities in a macro sweet spot and The trend is your friend (breadth, seasonality and sentiment too)). As the SPX struggles with a technical resistance level at about 2080, there are signs that the market may be due for a temporary pause in the uptrend for the following reasons:

• Negative divergence in breadth and momentum indicators
• Price mean reversion in a post option-expiry (OpEx) week 

This is purely a tactical trading call with a time horizon of 1-2 weeks.

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