The market remains caught in a back and forth struggle between the bulls and bears for control of market direction. While price has largely been tracking sideways in a range since early June, it is currently dancing around at the upper end of that range (getting ready for a upward push?).
The good news for today is that the bulls closed the market well off the lows of the day. And there is no technical damage, just a sideways battle.
Breadth flipped negative, but we can see by the chart that this signal has also been up and down, so until this sideways pattern is broken, I can't get excited about a positive or negative signal by this measure.
But as I posted earlier this afternoon, the bulls got good news in that NAAIM got more bullish as long positions were added to and short positions were reduced. The bears among them are not excited about their prospects for making money on the short side. But the bulls are highly leveraged on the long side. Remember, this is smart money. I get the impression that they may know that something is coming (news) that is going to push this market to the upside. That doesn't necessarily mean a moon shot, as we have no way of knowing how much of a rally we might see (assuming we do indeed see one). NAAIM is a sentiment indicator, and a pretty good one for the most part. And while it was modestly bullish last week, it is at least moderately so now. Their long positioning in stocks is obvious.
It's been about 5 weeks since the June peak, maybe a breakout is getting near? It's very possible and even likely based on the NAAIM reading. It's all about risk and right now risk favors the bulls.
I remain bullish.