On January 24 the Stock Indices traded through important support, but then buyers came in and drove price higher. Since then, they have been in a rotational pattern. This makes the extremes of that rotation extremely important. While there is a good chance of a false breakout to the upside early in the week, just as the S&P had a false breakout longer-term in December, if it is not supported by the internals, there will be another rotation lower. Alternately, if lower support is broken, the January 24 low will likely be taken out.
Friday’s price development appeared to be strong, but it was not supported by the internals. Even volume is not increasing. I have to allow for some possible upside the first part of the week. However, if it is not sustained, sellers may likely take over once again.