Now that’s what I’m talking about. I have been discussing the overbought technical conditions of the S&P 500 for some time and the need for a pullback to test bullish support levels. And as many commentators have suggested, the more time between pullbacks, the more severe is the action when it finally arrives. Bears had become very hungry after a prolonged hibernation. This week offered up a nasty pullback.
Last week was horrible, while today was quite good, albeit on low volume. What happened? Let’s review the facts.
Last week, the S&P 500 dropped over -4% to close Friday at the key support at 1295, off nearly -8% from its April high. Mid-cap Growth was the worst style/cap, down -6.2%. The best was Large-cap Value, off -4.3%.
