The Stock Indices recovered nicely from an extreme oversold condition on Wednesday.  However, they closed Friday near extremely important support levels.  The day patterns suggest exhaustion on the part of buyers, and they closed in an extreme overbought condition.  I signaled in Wednesday’s Briefing the oversold condition and to expect some type of rotation up on Thursday.   That is exactly what occurred.  The Indices are in the exact opposite condition now.  The coming week will be very important in terms of price development.  The week will start with the Indices overbought and a signal buyers exhausted themselves on Friday.  Unless new buyers come into theRead More →

The Stock Indices continue to pause in multiple timeframes.  While the NASDAQ is making slight new highs, the actual number of stocks that make up the Index are declining.  The price rise is led by a few more highly weighted stocks.  At this point, the Russell is showing more weakness, followed by the S&P and the NASDAQ demonstrating the most strength.  The Dow Transports are still unable to breakout, even though the Industrials linger at all-time highs.  These inter-market divergences do not show a market that has internal strength.  It may be they are waiting for some news event that will give them the fuelRead More →

The development of price on Friday in the Stock Indices was very interesting.  Market Breadth was strengthening throughout the day, while price simply rotated at a very important resistance level.  Late in the day, the Breadth strength enabled price to move up and slightly above resistance in two different timeframes.  Volume was still low, but that should build on itself, if the Indices are in the process of beginning a new leg higher.  This makes what happens on Monday extremely important.  Any move higher above Friday’s highs will need to be accompanied by increasing volume and Breadth.  If not, the Indices may have completed aRead More →

The S&P closed the week testing the highs.  In doing so, they approached on extremely low volume and in an overbought condition.  This signaled a potential pause, which is what occurred on Thursday and Friday.  The NASDAQ was on fire as some of the more heavily weighted stocks had substantial earnings reports.  However, the majority of NASDAQ stocks were declining going into the highs last week.  It will be important to see how this divergence is reconciled.  Finally, the Russell moved back down to test important support and closed at the low of the day, suggesting follow through for Monday.  The Indices are now closeRead More →

The Stock Indices continued with their longer term pause or countertrend rotation last week.  Internally, there is no signal of strength building to the downside, neither is there to the upside.  It appears traders are paused looking for information that will fuel the next larger degree move.  While important support levels are holding, there is a possibility of another 2% – 3% decline in price before the rotation is complete.  This would put the S&P down to the 2225 area, which would be extremely important support.  If that were to occur, it could open up a tremendous buying opportunity. In the meantime, if there isRead More →

The selloff in the Stock Indices brought them at Friday’s close to very important support levels.  While the move into the current lows is important in terms of price, it was not impulsive.  That can change, but at least for now, it suggests the move into these Key Reference Areas will not result in vertical development.  In fact, the move was very choppy, suggesting only a slight edge being given to sellers.  Thursday’s low could also have been some liquidation going into a three day weekend in the face of potential geopolitical events.  There are three strategies facing the short to intermediate term development theRead More →

The Stock Indices are at very important support levels.  Breaking through and closing below them will suggest the Markets are transitioning from a short term correction to something more intermediate term.  There are some longer term issues with the internals and inter-market divergences, but if those can be corrected in the coming week, there is a potential for either another leg up, or the Indices may get stuck in a trading range.    The one event traders are looking for to drive valuations higher is fiscal reform.  If there is still hope for reform, we will hold above current levels.  If not, expect lower prices.  What happensRead More →

The development and structure of the Stock Indices is improving from a longer term time perspective.  However, short term, there may be some additional downside that may occur early in the week.  The Indices are in a pause phase but are also tightening, suggesting a breakaway move may be coming.  If that occurs, it could be another good move.  Closing at the low on Friday may suggest there is more downside for Monday.  If that is the case, how any move lower develops will be extremely important to the intermediate term timeframe and therefore price. Unless or until lower support levels are broken, the currentRead More →

In the weekend Briefing I explain the longer term price development of the Stock Indices and compare that to the structure of the trend.  You will see clearly how the internals were signaling there was going to be some type of countertrend rotation.  The uptrend was simply unsustainable with declining internals.  The question now facing us is whether this is a short term pause or if it will develop into something greater in degree of time and price to the downside.   Both the S&P and NASDAQ are at very important support levels.  Breaking 2350 in the S&P would confirm the move is at least anRead More →

I have taken some time in the Briefing to discuss the development of the Stock Indices in multiple timeframes and have given a good example of strategic development and tactical entries on a one minute and sixty minute basis.  It was obvious from the internal structure of the rally into this week that it was weak and weakening, suggesting some type of pause or countertrend rotation was possible.  That is what has occurred in the last four days of trading.  Friday afternoon saw a short term strengthening of the Indices, with volume and breadth beginning to strengthen and a one minute breakout to test theRead More →