Market Internals Again Undercut Intraday High – Watch

Jun 3, 2010: 12:19 PM CST

The market has pushed into a key resistance level – the 1,100 area – and all three key market internals have deteriorated, which is a non-confirmation and potential bearish signal at the highs.

Let’s take a look:

Pay close attention to the new intraday – and short-term recovery – high of 1,105 that formed this morning.

ALL three internals – Breadth, TICK Extreme, and Volume Difference – formed CLEAR lower highs that undercut/disconfirmed the recent price high.

Fewer stocks participated in the index high, and unless we see a strengthening in internals, odds are strong that the price will breakdown.

Take a look back at my prior posts from the last time this situation happened:

If the Market is Going to Turn Down, it will Do so Here”  (it did)

Triple Index Reference Levels to Watch” (they turned down at the averages)

May 14:  Market Sells Off Exactly On Cue” (will this happen again?)

The 1,100 Level is key to watch, as I wrote last night.

Why?

The 200day SMA rests at 1,106
The 38.2% Fibonacci Retracement rests at 1,108
“Round Number” Resistance is 1,100

When you get a confluence of resistance and see price rally into that resistance level on declining volume and market internals, odds strongly favor a reversal down.

It’s not guaranteed – it’s all probabilities – but unless we see any sudden rise in price and a pick-up in market internals, it’d probably be a good idea to assume that resistance will likely hold here.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

4 Comments

4 Responses to “Market Internals Again Undercut Intraday High – Watch”

  1. The S&P, $SPX, Trades At 1,098 …. Support Is Lower At 1090, 1070 and 1050 « EconomicReview Journal Says:

    […] Corey Rosenbloom reports Market Internals Undercut Again […]

  2. Intraday Reversal and Popped Stops Example June 3 | Afraid to Trade.com Blog Says:

    […] To get a feel for the psychology of the chart as this unfolded in real-time, take a look at my earlier comments on the divergence in market internals. […]

  3. Intraday Reversal and Popped Stops Example June 3 Says:

    […] To get a feel for the psychology of the chart as this unfolded in real-time, take a look at my earlier comments on the divergence in market internals. […]

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