Market Breadth Strengthens. Volume Collapses.

The Stock Indices have been in a rotational pattern for about two weeks. Two important events have occurred. The S&P and NASDAQ are testing the upper extremes for a potential breakout. Second, market breadth has been strengthening. The negative event is volume. Volume is absolutely collapsing.

The Indices could breakout to the upside of their respective rotational areas on Monday. However, watch market breadth carefully. If it is weaker than Friday, it will signal a possible false breakout and possible rotation back through the range. As I stated above, volume is concerning me. Any attempt to move higher is not being supported by more buyers. This is likely a time to be very cautious and to use good stop management on any breakout move.

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