Stock Index Prices Diverge From Internals

The internals of the market are diverging from the rally we saw this week. That suggests the potential for some type of move lower to test and possibly trade through very important support. While it is always a higher probability for price to correct to the internals, there is a small probability of the internals correcting to price. That typically happens around a news event where the perception of value on the part of traders is changed due to the news. There is a Fed announcement next week that certainly can change the perception of value. Therefore, we have to be aware the market is very weak now but the Fed announcement could change that.

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