The latter scenario seems to be winning out. The market is catching a case of round number-itis for the following reasons:
- Macro momentum became "overbought";
- Overly bullish short-term sentiment; and
- Deteriorating short-term breadth.
I would caution that this is purely a tactical call of a short-term SPX correction of no more than 3-5%. As I wrote two weeks ago: Be patient, it's hard to argue against the intermediate term bullish trend.
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