Stock Indices Complete A Rotation Lower

As discussed in last Friday’s Briefing and the inter-week updates, the Stock Indices have fulfilled technical levels for a decline. They ended the week extremely oversold, which suggests some type of pause or rotation back up. The move off of today’s low was signaled by a divergence in Market Breadth. It was strengthening as price was still declining. The question now is whether the current rotation down is complete and we will see a move back up to test the highs, or if we will see a pause to work off the oversold condition before another leg down.

How any pause or countertrend move develops will be very important. I would speculate, if there is another leg down, it could be a very impulsive move. However, the probabilities are about equal that this move lower is complete and we could see rotation back up. Monday’s Briefing will be very important.

DAILY BRIEFING 181005 from Joe Mertes on Vimeo.

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