Info!! Sizing Upward The Downwards Market

Stocks accept started the twelvemonth on a especially weak note, retracing the lion's portion of rally from mid-December.  This has real much stand upwards for the before mentioned query, inwards which real high levels of bullishness amidst ETF buyers has led to misfortunate near-term returns.

Above are 3 updated views on the marketplace position weakness.  The top nautical chart illustrates the high grade of programmatic selling swamping the recent market.  This measure, based on a handbasket of institutional favorite stocks too their simultaneous upticking vs. downticking, shows that selling pressure level inwards these large cap shares has been intense.

When nosotros await at the entire market, however, it's non clear that the deep selling of the institutional favorites has translated too then far into highly wide selling.  The 2nd nautical chart tracks stocks across all exchanges making fresh 3 calendar month highs vs. 3 calendar month lows.  Note how novel lows are nowhere most the levels seen inwards mid-December too mid-October.

That same motion painting emerges from my mensurate of buying pressure level (upticks) versus selling pressure level (downticks) across all NYSE shares (bottom chart).  While the residual betwixt buying too selling has turned negative, it past times no agency reflects the breadth of selling that nosotros saw inwards mid-October or mid-December.

Deep selling that cannot operate past times wide selling invites the hypothesis of underlying forcefulness inwards the wide stock market. I volition move watching novel highs too lows too sensitive momentum measures closely to run across if this reject begins to arrive at or lose steam.  If the latter, nosotros could run across a salubrious rally emerging from the recent gloom.

Further Reading:  When V Bottoms are non V Bottoms
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