Are we returning to a more normal market?

By Lawrence G. McMillan

Yesterday seemed to be a typical “Turnaround Tuesday” – an opposite reaction to a strong market move on Monday.  In the past, this was a common occurrence, but so far this year there hasn’t been much of anything that would cause the market to decline.  So perhaps we are returning to a bit more of a normal, and perhaps more volatile, market. $SPX made a new post-2008 intraday high before closing lower.  There is support near 1410, and then stronger support at 1385-1390.  Overnight, the S&P futures tried to rally, but that rally has disappeared this morning, as those futures are now down slightly in Globex trading.

Breadth deteriorated during the day on Tuesday, and by day’s end the NYSE-based breadth oscillator had generated yet another sell signal.  This is the fifth such sell signal since mid-February.  Obviously, the others have indicated only mild setbacks in $SPX and not a full-fledged market correction, but one does have to wonder how long this market can keep making new highs when breadth is so mediocre...

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