I have been thinking that it was likely we were going to get a retest of lows and I couldn't help getting that nagging feeling that too many people were including myself. In addition, today we got potential bottoming set ups on a few indexes, the NYA, IWM, and the hated biotechs IBB.
Towards close I very reluctantly pulled off my short positions and went flat. By end of the day, there were way too many buy signals on the daily for some indexes/ sectors to go short. Who knows many we do get that big retest of lows but I would be violating my own system (one of the best long setups I have used over the years has been a low volume retest with positive divergence + stoch/ CCI cross) to stay short.
So on to the indexes that were starting to spook me out.
$NYA has a convincing set up and I often cross reference SPY/ SPX with this index as a bellweather for the market in general. Stochs/ CCI leading out of oversold territory, positive divergence, and lower volume on retest all check.