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The NYSE A/D line made new highs last week and is positive for the intermediate term, but it has formed a short-term divergence. This combined with the failure of the McClellan Oscillator (a short-term A/D indicator) to make new highs suggests the S&P may be ready to pull back to good support in the 1100-1110 area. This should be a buying opportunity. The NYSE Composite came within 35 points of our next resistance targets on Friday and could correct to the 7050 area. A very strong day of A/D numbers on Tuesday could turn the short-term outlook around.
Tom Aspray, professional trader and analyst, serves as video content editor for MoneyShow.com. The views expressed here are his own.
