Stock Indices Rally On Internal Divergences

The Stock Indices have continued to pause with an upward bias. This gives me some concern. The market internals are weak and continue to weaken. Most importantly is Volume across all of the Indices. It has absolutely collapsed. This suggests new buyers are not being attracted to the rally. The lack of selling pressure is the only internal component that is keeping this market from some type of countertrend rotation. Based on this, the risk is to the downside. Use good stop management and look for support areas that might be broken. On the other hand, any continuation of the rally on strengthening internals, especially volume, should be bought.

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