However, even though selling was relentless during the day, there was a very strong buying wave at the end of the day.
As a consequence, the Daily Money Flow picture looked positive across the board, even if the Cumulative Tick was negative.
The ratio of sectors waiting for a short signal is now even getting further away from issuing a short signal.
We can see below that the bounce continued overnight with prices already reverting above yesterday's open.
Conclusion:
We can see below that in terms of the New-highs-new-lows indicator, yesterday's pullback corresponds to 'buy the dip' past pullbacks.
Of course, a market crash would offer a picture rather different such as the one we witnessed in March 2020, but nothing points to a coming crash. To the contrary, the FOMC announcement of tomorrow could lead to a renewed market strength, especially if there is no Chinese credit issue contamination.
