Stock Indices Rally Off Oversold Condition

As discussed in the weekend Briefing, the Stock Indices finished last week extremely oversold. This suggested some type of countertrend rotation to work off the oversold condition. Additionally, at the low of today, breadth was diverging and strengthening, suggesting the rotation up was likely. At the close today, some of the oversold condition is worked off. However, it does not preclude the Indices from continuing the rally or pausing for another day or two. The Briefing outlines important resistance levels.

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