UBS Trade Desk Sees Sell-Off Ahead Then Rebound

With the S&P 500 down over 11 points today – breaking an odd string of low volatility, sideways trading in a tight range price range dating back more than a month – where are the markets headed? Technical analysis off the UBS sales trading desk suggests that stocks could experience a brief sell-off. The more meaningful question, however, is regarding a long-term market top. That is a risk and certain divergences among correlated indicators are flashing warning signs.

Watch for a pullback, then rally

What is likely to occur over the near term is a stock market retracement trend, UBS sales trading desk technical analysts Michael Riesner and...