Sentiment and technicals are combining to drive equities higher into a turn window

Sometimes you just gotta believe. Of course, there are some different ideas about the timing (and levels) for the turn we're expecting. One of the major ones is Terry Laundry's "T" date of Thursday, the 21st. While there are indications that this rally leg could persist after that (plus Andre Gratian is weighing some turn date alternatives), I'm planning to retire my last round of swing longs in a couple of days. If only to be on the safe side. But check out the charts below. Sure, sentiment is extended to the bullish side. But on the VIX "opex" today, it kept rolling down under that 20-day moving average (20-dma) resistance. I'll be just as glad if it spends Thursday underneath 17 - will see.

Then there's the advance/decline - using that for Nasdaq (since $NYAD includes so much fixed-income securities trading). The A/D ticked up again but maybe we're seeing a bit of negative divergence in its own RSI, which can help point to a turn soon. And the TRIN - its MA's are all above 1.2, except for its 10-dma (still over 1.1) and its actual closing value was under 0.80. That's a start. I don't see how its MA's can get under 0.80 by Thursday - this may be an early clue that a correction won't be too deep yet (or that the turn might come after 1/21).

Well it remains valid for position and swing traders to be in the mode of selling into strength. Once the turn is in, the game will become selling rallies. A lot of things did well today (even RTH and especially DDS, and M, did well; also USX, healthcare, etc.). But once a turn happens, we can't guarantee it doesn't sweep along many sectors. So traders can trade around all this, and we'll all keep getting or being ready once the market rings its bell (1160-something, it seems?) and the turn we're expecting starts to manifest.