Stock Indices Pause At Important Resistance On Weak Internals

Over the past few weeks, the Stock Indices have trended higher. The key to analyzing the trend is the fact the internal strength of the move was weak and weakening and inter-market divergences existed. This led to a pause for about two weeks at a very important upside resistance area. The last two days of the week have suggested a possible greater degree time and price rotation may be in the near future. Stocks have simply run out of gas. Unless there is some news event that provides the fuel to drive price higher, profit-taking will become a higher probability.

The Indices are oversold as of Friday, but it does not preclude them from trading lower on Monday. The risk is to the downside unless there is more fuel added to drive price higher.

Leave a Reply

Your email address will not be published.