For the last two weeks I have been discussing the internal weakness of the current uptrend in stocks. Beginning yesterday, with follow through today, the Indices may be in the process of developing into a greater degree time and price countertrend move lower.
Today, volume increased as price moved higher. Breadth did not get to an extreme low, allowing for more downside movement. All of the Indices, except the Dow Industrials are at important short term support and they closed at the low of the day, suggesting more downside on Monday. Breaking those support levels will then open the higher probability of at least an intermediate term move lower to test support.
Monday and Tuesday’s price development and internal structure will give us important information as to the potential price correction.