Last week's indicator review emphasized a lack of buyer involvement manifesting itself across a diversity of measures. Particularly noteworthy were weakness inward coin flows together with inward the Cumulative NYSE TICK. That lack of involvement translated into farther toll weakness this by week, every bit the S&P 500 Index ($SPX) moved to multi-week lows.
On Friday, nosotros had 402 novel 65-day highs across all NYSE, NASDAQ, together with ASE issues against 360 novel lows (top chart). The latter is the highest compass of novel lows since mid-April. H5N1 like painting exhibit tin forcefulness out live on seen alongside fresh 20-day lows across the exchanges. Fri recorded 642 novel 20-day highs against 1242 novel lows. That is the highest compass of novel 20-day lows since March 20th.
This weakness has hitting a bulk of stock marketplace sectors. Only the loose energy sector of the S&P 500 Index continues to register positive values inward my Technical Strength index of trending. Among the forty stocks inward my basket, evenly drawn from 8 S&P 500 sectors, nosotros accept every bit of Fri vii stocks inward uptrends, 4 neutral, together with 29 inward downtrends. Only 43% of S&P 500 stocks are straight off trading inward a higher identify their 50-day moving averages, downward from 80% at the marketplace peak. Only 29% of those stocks are straight off trading inward a higher identify their 20-day moving averages.
Despite this weakness, nosotros are non withal recording meaning oversold levels inward my Cumulative Demand-Supply Index (middle chart), though the index has been deteriorating for a while. Readings below -20 accept tended to accompany skilful intermediate-term buying opportunities; the electrical flow reading is -4.69.
Money flows for the Dow thirty industrial stocks (bottom chart) rest negative, with the four-day average continuing below the nix line. That agency that to a greater extent than dollars are flowing out of those stocks than coming in. Interestingly, coin flows during the final few days of weakness accept non been every bit negative every bit seen a twosome of weeks ago, only this volition entirely live on an of import constituent for stocks if nosotros commencement to come across divergences inward other measures, such every bit the novel highs/lows.
In all, there's non much to live on excited well-nigh for the bulls. H5N1 hold off at the sectors shows fresh send marketplace lows for banking stocks together with homebuilder shares. These sectors are the equivalent of the tech stocks during the 2000-2003 downturn; it is hard to imagine a sustained bull marketplace with these leading the downside.
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Review of Sector Performance
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