First, let me apologize. I am having problems with my recording program and cannot do a recording today, so I will write it and work on the program over the weekend.

While the news carried hope of an Iran settlement, most expected the Stock Indices to flourish. If there is a settlement, this may be one of those, “Buy the rumor, sell the news” events.

The Indices basically had a day of rotation, while the market internals weakened slightly. There were volume spikes at the close. Looking into those spikes through net volume, most of it was selling volume. Net volume in the NYSE was actually negative, meaning there was more selling volume than buying volume. Net volume in the NASDAQ was down but still positive. However, the Russell followed the NYSE and saw negative net volume as well. Market breadth in all three Indices was down with all three Indices showing negative breadth. The percentage of stocks above their 20-day and 50-day moving average declined slightly after recovering somewhat during the week. They still show a large bearish divergence.

Finally, due to the rotational pattern today, the Indices are neither overbought, nor oversold.

If there is an announcement on the events of the Middle East over the weekend, it will be interesting to see if the rally will continue, or whether there will be some type of countertrend reversal. After all, on the longer-term charts there has not been a significant countertrend move in quite some time. A good countertrend move can actually be healthy for a strong trend and offer new opportunities for positions.

The first hour of trading on Monday should give a good indication as to whether the rally still has legs, or whether there will be some degree of time and price countertrend move.