After the holiday week, the Stock Indices had a slow start last week but finished strong. The breakout was in multiple timeframes and was certainly supported by Market Breadth. The one laggard was volume. If there had been more volume, we might have seen even higher prices.
The Indices closed at the high of the day on Friday, suggesting they will move higher on Monday. However, they have reached a point of being extremely overbought. Therefore, if there are higher prices on Monday and there is a divergence in breadth, expect some type of pause or short term rotation to work off the overbought condition.
The trend is up and it is supported by good participation. The one thing we need to see, if prices continue to move higher, is an increase in volume.
DAILY BRIEFING 201205 from Joe Mertes on Vimeo.