Market Internals Weak As Price Hits Important Support

The Indices continued their slide today, supported by a continuation of weak internals. Additionally, important support was broken. There are three possible scenarios. 1) The Indices are oversold and the countertrend rotation down is complete. A lower low tomorrow would suggest this is not the case. 2) The Indices are oversold and they will rotate higher to work off the oversold condition before another thrust lower. 3) The recent selloff is not a countertrend move but a developing new bear trend. Analysis of price development over the next several days will give us a clearer picture of which possibility is becoming the higher probability.

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