The Stock Indices were driven mostly by news last week. That resulted in very choppy moves. However, if you step back from the news driven volatility of last week, you can see the longer term development of price and where important levels of support and resistance have developed. Important is also the analysis of the market internals in those moves. Going into Thursday’s high there was a clear indication the internals were weakening and unless they strengthened, some type of rotation lower was increasing in probability. That occurred on Friday.
It is clear now from an intermediate term perspective, a break of support or resistance will give a fairly good move in the direction of the break. Until those extremes are tested, expect a continuation of the rotation we have seen since the end of August.