The Stock Indices all started a selloff at the end of the week. However, other than extremely negative breadth, volume still continued to decline, suggesting the move is not yet impulsive. The NASDAQ and Russell are now testing very important support and breakout areas, while the S&P has traded and closed below support. The Dow Industrials and Transports have both failed to trade above resistance.
This brings us to the first part of next week. Trading will begin with the Indices at an extreme oversold condition. This suggests some type of pause is possible. The support/resistance levels discussed in the Briefing are extremely important. If there is a continuation of lower prices, volume will need to increase to confirm it is becoming an impulsive move. If it does not, then the higher probability is a continuation of this slow grind higher.
DAILY BRIEFING 200502 from Joe Mertes on Vimeo.