A Quick Pre-Fed Check On SP500 Market InternalsCorey Rosenbloomupdated May 01, 2013TweetAt GET.com we maintain complete editorial integrity on our content & provide transparent & unbiased information. Companies don't pay us to include their products although we receive a compensation when you successfully apply to products from our partners. See how we make money here.At GET.com we maintain complete editorial integrity.The main chart-based theme is that the SP500 is trading into the “Will it or Won’t it Break” key level of 1,600, so let’s take a quick peek at Breadth Market Internals to get clues beyond what price is telling us.First, the broader 30-min intraday picture: I’ve highlighted three prior days where Market Internals (Breadth and Volume Difference of Breadth) clearly diverged with price. You can see the outcome in each of these three recent events. Typically, strength (or confirmation) in market internals tends to precede continuation or higher prices yet to come while weakness (new lows) in internals forecasts lower prices yet to come. I’m keen to focus on divergences or non-confirmation signals to provide clues for potential short-term reversals or retracements that set-up two or more days worth of trading in a new short-term reversal direction. For reference, the three prior divergence days occurred on April 11, April 18, and finally April 25. We see a current divergence as we turn the corner into the new month of May 2013.Here’s a ’step inside’ view of the current structure: While price remains in a clear intraday uptrend, is it stalling or finding resistance just under the critical and obvious resistance target of 1,600. Market Internals suggests caution or a potential short-term reversal may be more likely than an immediate breakout, but divergences DO NOT guarantee reversals. For example, take the case of the clear divergence into April 25th. With the first push into 1,590, price did trade lower in the morning session of April 26, falling points, but a mid-day “V-Spike Reversal” pattern resulted in a continuation of the prevailing trend. In other words, the divergence was “good” only for a retracement, not a short-term or multi-day reversal event. That’s what we’ll be watching currently with respect to the 10 point morning sell-off as we start May. As we observe the market reaction to the upcoming Federal Reserve policy decision, keep focused on key short-term trendlines and the caution sign from market internals. In the event price does swing to a new index high, be sure to update your chart of market internals and see whether they confirm the new high or else extend the current divergence pattern. Follow along each evening by joining our membership services for daily or weekly commentary, education, and timely analysis beyond the daily blog commentariesEditorial Disclosure: Any personal views and opinions expressed by the author in this article are the author's own and do not necessarily reflect the viewpoint of GET.com. The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone, not those of the companies mentioned, and have not been reviewed, approved or otherwise endorsed by any of these entities.