Intermarket and Internal Divergences Become More Severe

The Stock Indices started the day with an impressive selloff. Market breadth was negative and volume was confirming the move. However, after reaching short-term support, the S&P and Dow Industrials rallied. That rally brought the S&P and Industrials to new all-time highs on negative market breadth and negative net volume. Caution is still warranted until the internals begin to strengthen.

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