Info!! Why I'm A Nervous Bull: Non-Confirmations Persist

my post service on transition patterns inwards the market, you'll run across why I'm a nervous bull. While the sectors are quite strong as well as we're seeing novel advance-decline business highs, the novel highs inwards the S&P 500 Index (SPY; occur chart) rest unconfirmed past times a number of sectors as well as indexes. While emerging markets (EEM; bottom chart) were the drivers for the rally since March, they lead keep failed to brand novel highs recently.

What suggests to me that this may non survive an isolated phenomenon is that commodities (DBC) lead keep besides failed to brand novel highs as well as commodity-related sectors (XLB, XLE) lead keep non confirmed novel highs inwards the S&P 500 Index. If increment as well as commodity need won't come upwards from the emerging nations, it is hard to believe that the slower growing developed markets volition sustain the bull.

Yet other non-confirmations come upwards from the number of stocks registering fresh 20- as well as 65-day highs. Those peaked inwards July as well as are notably lower during the recent marketplace position highs, suggesting that fewer issues are participating inwards the index strength. That's commonly non a recipe for ongoing marketplace position strength.

It besides raises the possibility that nosotros saw a momentum high inwards July, a rigid pullback concluding week, as well as straight off cost highs on lower participation. If this is, indeed, a larger timeframe transition blueprint inwards the making, nosotros should neglect at these highs as well as start a abrupt pullback that would lead keep us below the lows of concluding week.

While I stick alongside my short-term indicators, such every bit Cumulative TICK as well as Demand/Supply, as well as those are bullish, the larger motion-picture demonstrate non-confirmations piece of job out me nervous as well as fix to contrary views. We need to run across day-over-day forcefulness here, confirming the bull move. Expanding novel 20-day lows would survive an of import indication that all is non good for the bull. Expanding 20-day highs would survive of import back upwards for the bulls. As always, I'll survive updating indicators via Twitter (free; subscribe/follow here)
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