It’s time for a mid-Monday afternoon check on the key Market Internals in the S&P 500, which are showing intraday strength as price forms a short-term symmetrical triangle.

Let’s see the internals and price levels to watch:

(Click for full-size image)

Price fell sharply on Friday, and formed a new short-term swing low of 1,061 before noon – and I’ve highlighted that period.

Look very closely at the three key Market Internals as price pushed to a new low:

Breadth recorded a clear higher low, TICK formed a short-term positive divergence, and VOLD formed a higher reading.

Taken together, all three key market internals formed a positive divergence on this morning’s low.

The implication is that we could see a continued upside push in price, if we break above short-term resistance at 1,070.

Let’s look at that specifically.

We have a symmetrical triangle forming in price, as I highlighted with blue trendlines.  The two prior price resistance levels – short term – exist at 1,070 and 1,072.

Look for a potential upside break if buyers push the index above 1,070 then above 1,072 – and montior any signs of intraday bullish impulse closely.

Otherwise, the inability of buyers to push above 1,072 continues the downtrend in place, so look for futher downside activity on a break under 1,065.

Those will be your key short-term price levels to watch.

Corey Rosenbloom, CMT
Afraid to Trade.com

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