Since the end of July the Stock Indices have been in a rotational pattern. At the end of October the Indices bounced off a lower support area and since then have moved impulsively higher. As of the end of the week, they are now approaching upper resistance. From an intermediate time perspective, a breakout higher should be a substantial move. However, as of Friday, the structure of the rally has been declining even to the point of there being more down volume than up volume and Market Breadth declining substantially.
With that said, it is typical for traders to step back as Stocks approach resistance. It is always a higher probability for price to correct to the internals. However, there is also a lower probability the internals will correct to price. That typically occurs around a news event. Strategically, a break of Thursday’s high or low should provide good trade location in the short term and potentially in a larger degree time frame.