Friday saw the SPY continue in a pause phase. The Dow Industrials traded lower. The NASDAQ moved higher and the Russell sold off. These intermarket divergences coupled with a deterioration of the market internals suggest the risk of another correction is the higher probability. However, we are coming into a bullish time of year. The Industrials could have just completed a three-step countertrend rotation and the Indices are all oversold. While this does not preclude additional downside, it will be important to monitor short-term support. If those levels are broken, selling could accelerate. On the other hand, if resistance is traded through and the internals strengthen, the Santa Clause rally is beginning.