TRIN says get your Arms around the idea the equities indices may be overbought

Nice moves today, up in the S&P 500 and other equities indices, fitting according to various of the methods we use and refer to - nice! Other markets also moved sharply against their trends from last week including crude oil, with USO (an oil ETF) testing its 50 dma from below. Nice snapback all around. Next, we see if it can sustain or if consolidation takes hold. While there are reasons the SPX can get to around 1110, or even around 1120, it isn't guaranteed. And depends also on what wave count it wants to express. For example, if it only put in a "wave a of 2," we could conceivably have a triangular wave b that essentially consolidates for a little while before its wave c finished that move up. There are also more bearish possibilities that can play out, so I don't want to be out there recommending that traders expect the SPX will get to 1110 or 1120 anytime soon. The real focus most of us should have is preparing for the next leg down - because as best I can determine, that's what we'll get in a matter of days.

The TRIN chart at bottom shows that the Arms index closed at 0.66 after a few days moving down. And most of its MA's are under 1.20. Meaning the Arms index isn't oversold. And the Nasdaq advance/decline volumes data (middle chart) moved up but still looks puny. So I'm doubting whether the SPX has the strength yet to get above its own MA resistance (see top chart, of the SPY). Notice also the volumes today and yesterday were relatively low - not the recipe for a meaningful rally. Pattern-wise I'd expect another day or so struggling before the next leg down - probably the indicators' changes during the next couple of days can give us a heads' up whether the next big swing move will be up or (as I tend to suspect) down.

If oil has trouble with that MA level as resistance, it can also be vulnerable to a further drop. And the VIX dropped today towards its own 50 DMA; another clue that this move may have been just a breather before we see a resumption of the stock market move down. That 1050/1060 area in the SPX may be waiting.