On a short-term basis, we have a trading sells on the S&P 500, Nasdaq Composite, Russell 2000 and the Midcap 400 (MDY). All of these indices are into a confluence of resistance and overbought. Our intermediate to long-term view remains bullish as we had extreme readings on a number of market internals into the December low.

A quick note on the S&P 500 which is up at an area of resistance as indicated by the trading ellipse indicator outlined on the attached chart. We expect a short-term pullback to start from here and will evaluate the downside target in next few days.

Volatility brings opportunity, and we sure have seen a lot of that in recent weeks. As we reviewed the a number of market indices and internals, we feel that for most markets, we have seen an internal low and now wait for the external low to take shape.

We like today's market internals and are upgrading the following indices to buy: The Russell 2000, Mid-Cap Index (MDY), and S&P 500. We are currently long the Dow Transports, DAX and CAC indices.

Holding the recent low will be key to signal a sustainable rally is at hand. Most U.S. sectors at at a MFU-3 or MUF-4 target level which is very good for the bulls, if there are any. Many internals stats suggest we have hit an extreme oversold level and this could very well be the ninth inning of a low forming, and the start of the first inning of more positive things to come. We will have our global sector piece out soon with suggested areas to get long.

This ratio chart is at the lower end of a long-term regression trend channel offering a good reward to risk entry for this pair trade.

The Dow Transports are is down to a zone where we would be looking for a long trade.

We got stopped out of our short-term buy on the NDX this week, and we are focusing on the important weekly timeframe where we are very close to the MFU-4 target of 6140.  The Nasdaq Composite, S&P 500, Dow Transports and Russell 2000 are at or near important areas that need to hold to have a near-term rally to start from.

We are getting long the NDX in the overnight session as the index has reversed up from the MOB support band.

WTI Crude Oil is approaching a range of support between $42—$45. Gold is close to our initial target of 1285 with improving momentum.

On the daily time frame, the SP is into a MOB support area of 2500-2540 and a zone to look for a "pop".

Today, we have another ellipse turning point signal triggering on a "long-term" timeframe as indicated by its green color.

This are a number of U.S. and European indices that have either achieved their Money Flow Unit targets or have held and reversed from a Make or Break (MOB) support band or an Ellipse target. There is enough here for us to be covering shorts in these indices and in many cases, going long.

In this Global Sector Matrix Report, we intend to identify which sectors are displaying strong to weak behavior based on our multi-factor ranking model. 

The Nasdaq 100 Emini has a short-term turn up from a MFU-4 level and at an Ellipse turning point indicator.