Stock Indices Break Above Resistance With Internal Support

Today, the Stock Indices broke above important resistance based on two news events. The positive part is breadth expanded nicely and the number of stocks trading above their 50 and 200 day moving averages expanded nicely. While the Market finished the day extremely overbought, I have to anticipate some type of pause or rotation to work off the overbought condition. A divergence in market breadth on any higher high, could suggest that pause is beginning. Volume is still not as strong as I would like to see, but it needs to build on higher prices.

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