Market Commentary: Bearish Signals Emerging

The market’s short-term outlook is tilting bearish as the 21-day stochastic drops below the 80% threshold and the price phase indicator trends downward. In a sideways environment, this suggests a potential pullback in price action.

Further reinforcing this caution, the price phase indicator, volume accumulation percentage, and advance/decline oscillator are all in decline. In a range-bound market, this trio of weakening indicators points to a possible short-term downturn.

Adding to the downside risk, volume distribution is rising despite a still-positive price phase indicator—a classic bearish non-confirmation. Moreover, the new high/new low indicator has reversed lower, a historically reliable warning that a downtrend may soon take hold. If momentum doesn’t shift, sellers could gain control in the near term.

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