Stock Indices Give Mixed Signals

The Stock Indices gave mixed signals today. While they all traded lower, there was not a capitulation move. Instead, there was a lot of chop toward the end of the day, followed by a rally into the close. NYSE breadth has been strengthening over the last three days, but NASDAQ breadth has been consistently negative. That has led the NYSE to be oversold, but the NASDAQ is extremely oversold. While the probability of a move higher is about the same as another leg down, the short-term support levels discussed in the Briefing will give a good indication of the next greater degree timeframe move.

The Indices closed near their highs, which also suggests potential follow-through in Monday’s trading. If the rally continues on Monday, breadth should strengthen significantly. If it doesn’t or if it declines after the open, expect another selloff.

Leave a Reply

Your email address will not be published. Required fields are marked *