Stock Indices Bounce Off Support, But May Be Weakening Again

The Stock Indices bounced off support this week, going from an oversold condition to overbought in one day. Breadth expanded but total volume declined, making the rally suspect. Two strategies have developed. If Friday’s high is traded through on expanding breadth and volume, expect the upper extreme to be tested and a possible breakout. On the other hand, if there is a high above Friday’s on weaker breadth, expect another possible leg lower to test support once again.

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