Finally we got both volume and new highs, and if these do not contracts too much on a retrenchment, yes, that would change the picture quite a lot. It means that finally leadership is emerging. You never get everything you want and right now I would like to see some leadership in the Dow as well. If on a retrenchment, the number of new lows rapidly gets above the 50 level, or the new highs contract under about 90 (on the Yahoo Naz count...), then the original scenario is still in place and this frolicky behavior (volume peak/new highs peak) may prove to be temporary. At this point, the test will probably be holding 1390 on any retrenchment, IMTO. If that is breached, the set up is very similar to what we had last April (4/17 to be specific, the breach that signaled the starting decline did not come until 4/22).
Zeev
