Stock Indices May Have Slightly More Upside Potential

The rotation down in the Stock Indices today was not an impulsive move. From a longer term basis, the rotation off the lows still appears to be countertrend, suggesting another test of the lows is the higher probability. However, they may still have slightly more upside work to accomplish before that begins. The NASDAQ was the stronger of the Indices today with the Russell and Transports weaker. Keep in mind, the Russell and Transports signaled a possible turn down at the all-time highs.

Volume on the move lower was very weak and the Indices went from an extremely overbought condition to extremely oversold in one trading day. That suggests there may be more upside work to accomplish. Watch the Russell and Transports closely. If they continue to move lower, it will suggest the others will follow and the move could become impulsive. Until that happens, use caution.

DAILY BRIEFING 200413 from Joe Mertes on Vimeo.

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