Sentiment is getting positive again after the SPX went for -23 to -11% in the last few weeks.
Today inflation numbers created a GAP on the SPX. Will it be able to consolidate 4200? Time will tell.
Managers that did not purchase last bottom are lagging the Indexes performance and shorts that wanted to see a lower lower in July now can say that they were proven wrong and are not likely to add long entries here because of the macro / sentiment improving.
For shorts, market is not cheap and it can get cheaper
For longs, market is not that expensive and have room to get a bit more costly…
Low volume price action is easier to negate than when volume is higher, on the other hand, we are in the middle of summer and I do not expect to see lower volume readings that we saw last 8 weeks. Time will tell us the correct answer.
Would you add shorts are current prices?