The Inflection Point

The Pullback & Rally Came Right on Schedule, It's Decision Time Now

Right after the Weekly Buy Signal concluded on Friday, May 16th, the Daily Sell Signal emerged on schedule, as anticipated.

The market dropped from 5,968 to 5,767—a nearly 200-point decline.

This pullback completely reset the 2-Hour Buy Signal and largely reset the Daily Buy Signal. In hindsight, it was a powerful setup.

I’ve optimized the Daily Signal algorithm to allow the 2-Hour Signal to take the lead. Backtesting reveals this adjustment aligns with patterns seen in more volatile market conditions.

Now, four days into the Daily Buy Signal, we’re entering the most critical week since the rally started in early April.

Why does next week matter so much?

The Daily Buy Signal, which triggered after market close on May 23rd, is nearing its completion. Plus, market internals are weakening for the first time since the rally began.

To break it down: from February 20th to April 7th, the Bears had the upper hand with weak market internals. Then, from April 8th to May 21st, the Bulls dominated with strong market internals.

However, this current 4-day Daily Buy Signal marks the first rally where market internals are diverging from price action.

A significant test looms as the Daily Buy Signal concludes next week.

Let’s dive into the details…