Last week the Stock Indices gave some mixed signals. Initially, the Russell began to show weakness followed by the Transports. However, on Friday the Russell showed more strength by testing support and then rocketing back up to test resistance. The Transports showed more weakness than the other Indices. In the past, if they begin to trade lower together, it was a signal of an impending correction.

While the trend of price is certainly up, it may be important to keep in mind support levels. As you will see in the Briefing, the structure of the current trend is weak and continuing to weaken. Unless this changes, the probability of some type of correction or pause is certainly an increasing possibility. It is always the higher probability for price to correct to the internals. However, there is also a smaller probability the internals will correct to support price. This typically occurs around a news event. Therefore, unless the internals strengthen, be aware of short-term and intermediate-term support levels if broken. Warning flags are up, but respect the trend

DAILY BRIEFING 210123 from Joe Mertes on Vimeo.