As discussed in Thursday’s Briefing, the Stock Indices did take out the recent lows, but as I also suggested, there was a slight strengthening in market breadth that suggested a short term low may be in place. They closed just above important support levels. This suggests the possibility of additional rotation up the first of the week. If that occurs, market breadth should strengthen to support that move.
While there are likely a lot of traders who are thinking of “buying the dip”, if they are not strong enough a short move up may occur on Monday met with increased selling that will take out Friday’s low. If that occurs, watch the market internals carefully. If they are strengthening to the downside, then we are transitioning into a greater degree time and price move lower. Friday’s low is extremely important.