As I discussed in the weekend Briefing and several times before, price in the Stock Indices diverged from the market internals as of Friday. Typically, price will correct to the internals. However, there is a smaller probability the internals will correct to support price but that is usually a result of a news event. That is exactly what occurred today with the announcement of a virus vaccine.
While price in all of the Indices opened higher, there were signs of slight irrational exuberance. Intermarket divergences developed and while the Russell tried to push higher, the other Indices struggled and ended up closing at their lows for the day. This led to the rally being suspect. There is a good chance of follow through tomorrow, but caution should be warranted, as discussed in the Briefing.
DAILY BRIEFING 201109 from Joe Mertes on Vimeo.