10/13 Momentum Top Redux
By
Rennie on Thursday, October 28th, 2010 at 9:56 pm
Thursday’s early run-up to just under SPX 1190, the second-highest high of this rally phase, failed to alleviate the recent trend of deteriorating market internals. New 52-week highs remain well below levels from Monday and even further below levels from 10/13. The same holds true on the NASDAQ even with the NDX closing at new highs Thursday. Fewer and fewer stocks have been participating in this rally over the last two weeks, consistent with the hypothesis that we put in a momentum top on 10/13 and have since followed that up with the ongoing formation of a potential price top on weak market internals.
Backing that viewpoint up, I see the following negative developments…
New 52-week lows are at their highest level in a month on both the NYSE and NASDAQ, as are new 20-day lows across all exchanges.
The number of S&P500 stocks closing under their lower bollinger band has been steadily increasing the last few days, even on Thursday with the S&P posting a higher high and low.
Thursday represented the 40th consecutive session in which the S&P has closed over its 20-day average. The SPX is trading higher than it was on October 13th, yet note that the percentage of stocks over their 20-day moving average has fallen from 84% on 10/13 to 57% today.
The cumulative version of SPX Up Volume – Down Volume topped on 10/13 and has been making lower highs since (this is based only on volume among the 500 SPX components).
TICKscore has been unsupportive of this entire move but has become especially negative recently. Over the last twelve sessions we’ve seen nothing but flat or negative readings, sending the cumulative version sharply lower. Take a look at this three-year chart to get an idea of how unusual it is to not see TICKscore backing up price.
The long-term chart of total issues on the NYSE is making new lows.
The 200-day moving average of NYSE (up volume – down volume) is acting much like the TICKscore indicator, fully unsupportive of the rally over the last two months. Pull up this three-year chart of the indicator to get an idea of how unusual it is to see this indicator not back up the kind of strong price move seen over the last two months.
The S&P is hovering just below long-term trendline resistance seen on this log chart. The line resides right around SPX 1200. Should we jump that line, many of the negative divergences above will most likely be nullified and it could be off to the races. I think the significant drop in upside momentum and growing downside momentum over the last couple of weeks will make that particularly difficult, and I would be surprised if we don’t trend lower into year-end.
10/13 Momentum Top Redux
By Rennie on Thursday, October 28th, 2010 at 9:56 pmThursday’s early run-up to just under SPX 1190, the second-highest high of this rally phase, failed to alleviate the recent trend of deteriorating market internals. New 52-week highs remain well below levels from Monday and even further below levels from 10/13. The same holds true on the NASDAQ even with the NDX closing at new highs Thursday. Fewer and fewer stocks have been participating in this rally over the last two weeks, consistent with the hypothesis that we put in a momentum top on 10/13 and have since followed that up with the ongoing formation of a potential price top on weak market internals.
Backing that viewpoint up, I see the following negative developments…
New 52-week lows are at their highest level in a month on both the NYSE and NASDAQ, as are new 20-day lows across all exchanges.
The number of S&P500 stocks closing under their lower bollinger band has been steadily increasing the last few days, even on Thursday with the S&P posting a higher high and low.
Thursday represented the 40th consecutive session in which the S&P has closed over its 20-day average. The SPX is trading higher than it was on October 13th, yet note that the percentage of stocks over their 20-day moving average has fallen from 84% on 10/13 to 57% today.
The cumulative version of SPX Up Volume – Down Volume topped on 10/13 and has been making lower highs since (this is based only on volume among the 500 SPX components).
TICKscore has been unsupportive of this entire move but has become especially negative recently. Over the last twelve sessions we’ve seen nothing but flat or negative readings, sending the cumulative version sharply lower. Take a look at this three-year chart to get an idea of how unusual it is to not see TICKscore backing up price.
The long-term chart of total issues on the NYSE is making new lows.
The 200-day moving average of NYSE (up volume – down volume) is acting much like the TICKscore indicator, fully unsupportive of the rally over the last two months. Pull up this three-year chart of the indicator to get an idea of how unusual it is to see this indicator not back up the kind of strong price move seen over the last two months.
The S&P is hovering just below long-term trendline resistance seen on this log chart. The line resides right around SPX 1200. Should we jump that line, many of the negative divergences above will most likely be nullified and it could be off to the races. I think the significant drop in upside momentum and growing downside momentum over the last couple of weeks will make that particularly difficult, and I would be surprised if we don’t trend lower into year-end.