Stock Indices Grind Higher As Internals Weaken

The Indices closed this week attempting an assault on the all-time highs. However, volume continues to collapse as market breadth declines. The percentage of stocks above their 50-day and 200-day moving averages are diverging as well. While the Spiders have exceeded a three-step equality, the QQQs and IWM are still within that strategy. If there is going to be a breakout to new highs, the internals must strengthen. On the other hand, if there is another rotation lower, the lack of selling pressure must be overcome, otherwise we will simply be stagnant in a rotational pattern for a while.

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