Turning Short-term defensive as a minor SPX pullback gets underway

Near-term US Equity trends look to be turning lower as $SPX's close at three-day lows changes the tactical view to cautious while we await further confirmation, even as the longer-term uptrend remains intact. It's right to turn defensive in the short run for those with a tactical bent, though the setup is genuinely conflicted. Both the 10-year yield and WTI Crude appear to be in the final stages of their bounces and should turn back down sharply on a probable ceasefire and reopening of the Strait within the next one to two weeks, a flush that would be supportive for risk assets. Against that, the negatives have stacked up: Financials remain extremely weak and are a large percentage of $SPX, market breadth has been poor, TD DeMark exhaustion signals are now aligned, short-term cycles are rolling over in mid-June, and $SPX fell to new three-day lows. My cycle work points lower near-term but may invert into a low next week, which would defer a more important peak and a larger selloff to the August-to-October window that fits mid-term seasonality. The bottom line is that a minor pullback should be getting underway, and what matters over the coming week is whether a reopening arrives in time to keep it muted.

$SPX fell to new three-day lows, turning the short-term trend down even as the larger uptrend remains intact

$SPX closed Wednesday at 7,553.67, lower by 56.10 or 0.74%, and notably fell to new three-day lows, which, despite still being above initial Ichimoku support, should bring about weakness given the confluence of short-term and intermediate-term DeMark indicator alignment.

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