The Stock Indices Move Higher Supported By Market Breadth

In the weekend Briefing, I suggested the possibility of a continuation of the rally off the recent lows. However, I also stated to look for a divergence in market breadth on any higher high over Friday. Today, the Indices moved higher and market breadth confirmed the move. However, intermarket divergences still exist and volume is extremely low. While the NASDAQ was on fire today, it did reach a point of being extremely overbought. Therefore, look for a potential pause tomorrow. If there is a higher high, once again, watch for a breadth divergence. It will signal a possible rotation down or pause to work off the overbought condition.

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