Info!! Fresh Views On Weak Markets

The weakness that has been showing upwards inward stocks picked upwards yesterday, with SPY (top chart) breaking to multi-day lows.  The middle nautical chart shows breadth specific to stocks inward the SPX universe:  it is a composite of the percentages of stocks trading higher upwards their 3, 5, 10, in addition to 20-day moving averages (data via Index Indicators).  Note how it tends to transcend ahead of cost in addition to frequently troughs ahead of marketplace bottoms equally well.  For the root fourth dimension inward a while, we've hitting an oversold degree like to levels that preceded marketplace lows inward early on August in addition to mid-October.

Once nosotros expand our hold back beyond the SPX universe, the pic becomes interesting.  My information demonstrate 891 stocks across all exchanges posting fresh monthly lows yesterday.  That compares with 1180 lows the twenty-four hours earlier in addition to 1007 lows the twenty-four hours earlier that.  As the bottom nautical chart (IWM) shows, smaller cap shares convey non posted multiday lows inward the same way that the large caps have.  That is noteworthy, because the smaller caps convey been surgical operation laggards since early on inward the year.

A overnice intraday say for yesterday's weakness was the high correlation across multiple property classes.  Stocks, the USA dollar, oil, in addition to high yield bonds all moved lower inward relative concert.  I volition live on watching closely to come across whether those rising macro correlations swamp the divergences that are showing upwards with stock indexes.  Good trading agency sustaining flexibility when prove is mixed in addition to conviction when prove lines up. 

Further Reading:  Keeping an Open Mind inward Roiling Markets
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