Stock Indices Approaching Important Support Levels

From a purely technical aspect, the Stock Indices appear to be reaching an important low, where we could see a bounce. Important support levels are being approached which allows for additional downside on Monday. However, if there is a divergence in Breadth, it will suggest at least a short term bottom is intact. Volume is still extremely low for a move down like this. The Briefing compares volume at this low with the low of December 24, 2018. There is a significant difference. While price suggests an impulsive move, the internals are not really confirming that. Longer term, Breadth is beginning to strengthen. As of today’s close, the Indices are oversold.

With that said, if you look at the December 24 low, there was a “flushing” of the market. High volume at the low suggested sellers had been flushed out and that is when the buying began. That could certainly be the case also on Monday. Watch for either event.

DAILY BRIEFING 190531 from Joe Mertes on Vimeo.

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