Breadth surge important, but doesn’t supply all the answers

The chart in this report is only accessible to members
The chart in this report is only accessible to members

SPX and QQQ have surged on above-average breadth and have carved out impulsive rallies over the past week.  This is likely a positive for gains into late this week.  However, it’s likely that SPX could find resistance initially just under October peaks and consolidate gains (Tuesday/early Wednesday?) before this move can continue.  US 10-Year Treasury yields have found initial support, and pullbacks in both Treasuries and US Dollar appear like bounces at this point, not sustainable declines.    

Bottom line, the rally off the 10/27/23 lows should play out as a three-wave bounce into late this week, in my view.  Given the extent of the buying drying up a bit on Monday, markets seem near a point where consolidation should occur before gains can continue.   

Interestingly enough, the influence of big-cap Technology has made its early influence on US Equity markets and has camouflaged the weakness being seen in other sectors.  At Noon pm EST on Monday, eight sectors were lower and Equal-weighted Technology proved to be the second worst performing sector behind Materials.

Yet, $XLK was higher by +0.36% and provided a mirage of a “positive market” on Monday.

Upside targets on this fir...
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