Major averages pulled back on higher but below average volume yesterday ahead of the three-day Easter holiday weekend which starts Friday. Oil fell, closing under $40/barrel due to a larger inventory build-up than expected. In addition, hawkish commentary from St. Louis Fed President Bullard further pressured the markets.
U.S. markets have opened down this morning as economic data came in weak over in Germany and France, while the price of oil continued lower.
Given the market's extended state, it is entitled to a pullback. Given that a number of standard-issue base breakouts have occurred over recent days, we would look to failure of these breakouts as a sign that the current rally is potentially failing.
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