Stock Indices At Important Short-Term Support

The low of today in the Stock Indices is very important. Breaking it will open the higher probability of a significant short-term move lower. The next level of support, discussed in the Briefing, will be even more important and could suggest an impulsive move.

The question facing us on Monday is whether the Indices are beginning to develop another leg lower, or if the rotation down today was simply a countertrend move off the recent lows.

The Russell, NASDAQ and Transports all closed at the low of the day. Remember, the Transports and Russell first signaled the last countertrend rotation down. Only the S&P and Dow Industrials held off the low. Market breadth was negative and declining all day, even as the Indices tried to rally. Volume increased slightly and new lows increased.

Important to the short term will be today’s low. Should the market trade and close below the low today, it will suggest the probabilities are beginning to increase for more downside.

DAILY BRIEFING 190517 from Joe Mertes on Vimeo.

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