This week, I have been more bearish than I have in the last few months, and I have said that we must respect the trend in price. This week, the market internals declined and diverged even more as the price of the Indices continued to push higher. It was unsustainable. That led to today’s selloff. The question now is whether the move is complete or if there is more downside work to do. On any lower prices on Monday, any divergences in the internals, especially breadth, could signal the move lower is complete and some type of rotation up is in the offing. On the other hand, lower prices with weaker internals will suggest the countertrend move is not yet complete.
