Last week's indicator review suggested that nosotros were probable to run across farther weakness, given the potent downside momentum going into the week. We did, indeed, larn a follow through to the downside, taking out the of import lows from May in addition to June. This turned the sector trends bearish in addition to expanded the release of stocks registering fresh 20-day lows (middle chart) earlier Monday's solid bounce.
That bounce took us from a moderately oversold degree inward the Cumulative Demand/Supply Index (DSI) to a neutral reading (top chart). Note how downside momentum inward the DSI did non confirm the recent lows, something we also saw inward the Cumulative Adjusted TICK. I volition hold out watching closely to run across if cost weakness going frontwards is increasingly accompanied yesteryear non-confirmations of momentum in addition to strength. That would advise that nosotros rest inward the make defined yesteryear the May/June highs in addition to lows in addition to could motion good into that make from electrical flow levels.
I perish on to persuasion the market's activity every bit to a greater extent than typical of a correction inward a bull marketplace than every bit the offset of a novel comport market. This is supported yesteryear the relatively little correction inward the advance-decline describe of piece of job specific to NYSE mutual stocks (bottom chart; mad props to the splendid in addition to much recommended Decision Point site).
An expansion of novel 20-day lows on subsequent marketplace weakness would violate this scenario in addition to signal to a to a greater extent than pregnant marketplace correction. I volition hold out tracking that in addition to other marketplace indicators inward my intraday Twitter posts (follow here) to justice how nosotros are trading inside the extended marketplace range.
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