The NYSE A/D line broke out to a new rally high today, while the Absolute Breadth Index turned up from its low on Friday. It would not be at all surprising to see new highs in the indexes tomorrow, but the question is whether or not these new highs will hold. At the moment, I will be content to be stopped out of index short positions with stops that are above the recent highs and wait for a retest of the break out levels before going long if the retest holds.
On the daily chart the pattern in the Qs looks like a running triangle, but on the 30 min chart, it is not so clear. If it is a triangle, that would point to a high in the near future as triangles always precede the final wave in a movement.
I still suspect that any new highs this week will be a fake-out until proven otherwise.
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