The Stock Indices had a little volatility today with up and down movements. However, the chart pattern suggests another greater degree countertrend three-step move may be developing. If this is the case, resistance in SPY is in the 410 area, and in the QQQ is 290 area. How the market interprets the election results will be key to the next degree move. Also, CPI is out Friday morning.
As anticipated in yesterday’s Briefing, there was a slight divergence in market breadth at today’s low. This led to a rotation higher on low volume. However, going into the close, important short-term support was traded through, suggesting the pause may be over.
The Stock Indices opened lower today, rallied, and then sold off. They are simply in an area of pause at an extremely important support level. Breadth is strengthening some. This has caused a slight divergence between price and breadth, but until there is an increase in volume in one direction or the other, we could be in for a lot of chop until traders decide whether value is higher or lower. This may be a very important week for the market. If there is a break to the downside, it could accelerate, if volume is increasing.