Today’s rally was spurred by an excellent jobs report. Structural divergences still exist but for today, the divergence in market breadth was eliminated. Going into the close the Indices were extremely overbought, suggesting the potential for a pause on Monday to work off the overbought condition. Based on the extent of today’s rally, I am surprised breadth was not stronger, which gives me a little concern, but that can change.
The Indices are at a decision point. Either they continue to move higher and the structure will strengthen to support price, or today’s rally will be looked at as a one day wonder. If there is a pause on Monday, how that develops will be very important.