Wednesday of last week saw a selloff in the Stock Indices. That selloff was signaled by a good divergence in market breadth. Friday, saw a bounce off the day’s low. The decline going into Friday suggests it is countertrend to the rally we have been experiencing. This should lead to another test of the highs, unless the move off the low is the second leg of a more complex countertrend move. Market internals on any additional move higher should help in confirming the countertrend move is complete.
Most important is the fact, the Indices, except for the Russell, cannot move significantly away from very important resistance from July. While they do make slight new highs, there is simply no impulsiveness to the moves. Therefore, support is like a magnet drawing them back. Those levels are outlined in the Briefing.