Stock Index Divergences Reappear

After a three-day selloff and a three-day rally, the Indices are back in the same situation they were going into Monday’s large decline. Intermarket and internal divergences have raised their heads again. In fact, market breadth today was extremely negative while the S&P and NASDAQ made highs above yesterday. Additionally, the Russell and Transports sold off instead of following the other two. Risk is still to the downside.

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