Market Internals Signaled A False Breakout

The Market internals signaled for some time the possibility of some type of rotation lower. Today, was a great example of the importance of analyzing, not just price development, but structure. The breakout higher on extremely weak breadth was a clear signal of the higher possibility of a false breakout.

Volume increased today. Up volume decreased and down volume increased. However, price rotated back up with the S&P putting in a new high. The question facing the Market tomorrow is whether today was the beginning of an increase in selling pressure, or it was a one-day move that is now complete. If complete, it will be important for the internals to begin to strengthen.

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