Stock Indices Fail To Take Out Important Support

Yestersay’s FOMC decision on interest rates gave a little fuel to the market in the form of a late afternoon rally that was soon deflated. Today, the Market saw a slight rally in front of the April employment numbers tomorrow morning. Breadth expanded nicely today but volume, once again, suggested new buyers were not entering the trading environment.

In the past Briefings I have discussed the countertrend rotation up that has been occurring and provided resistance areas that were met alomost exacctly. As discussed, if the downtrend is to continue, then it will be important for the SPY to trade and close below 497.50 and for the QQQ to trade and close below 420. Failure to do so will suggest the three step move is developing into a rotational pause. Trading below those levels will open the possibility of testing the recent lows and then extending further to the downside.

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