Market Internals 2011-08-16

As indicated yesterday before market close that a pullback is due and that it is likely in the afterhours session, here it is – a selloff in the night at 20 S&P points range.

This pullback may not be just a pullback at all. It is confirmed by breadth yesterday that it is overbought in both 3-day advance issues and Tick16 short term.

As Tick16 Long Term is still within mildly negative territory, all overbought condition in breadth will likely result in snap back like what we are seeing now this morning.

How far down this drop will stop depends on the breadth finding a bottom quickly within the coming few days.

Obvious target is Emini S&P at 1177 (the gap fill zone) and next in line is below 1170.

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