Under the Surface, Downside Momentum Continues to Build
By
Rennie on Monday, November 1st, 2010 at 9:04 pm
The S&P500 ran up and tagged the 10/25 intraday high before settling near unchanged levels Monday. Despite the early strength, we’re once again seeing a number of negative developments beneath the surface…
New 52-week lows hit their highest level in a month on both the NYSE and NASDAQ.
New 20-day lows across all exchanges exceeded 500 on Monday, the largest number of new 20-day lows since August.
The net difference between the number of OEX stocks that closed over their upper bollinger band and those that closed under their lower band came in at -5 Monday, the lowest reading since August.
The number of stocks within the S&P500 universe that closed under their lower bollinger band increased for the fifth consecutive session and currently outnumbers those that closed over their upper band.
All of the above points to a continuing trend of growing downside momentum. With the equity put/call ratio 10-day average trending higher and the NYSE TICK hitting a fresh 5-day low Monday (triggering the one-day sell signal recently discussed in this October 13th column), it continues to look like the path of least resistance is to the downside.
Under the Surface, Downside Momentum Continues to Build
By Rennie on Monday, November 1st, 2010 at 9:04 pmThe S&P500 ran up and tagged the 10/25 intraday high before settling near unchanged levels Monday. Despite the early strength, we’re once again seeing a number of negative developments beneath the surface…
New 52-week lows hit their highest level in a month on both the NYSE and NASDAQ.
New 20-day lows across all exchanges exceeded 500 on Monday, the largest number of new 20-day lows since August.
The net difference between the number of OEX stocks that closed over their upper bollinger band and those that closed under their lower band came in at -5 Monday, the lowest reading since August.
The number of stocks within the S&P500 universe that closed under their lower bollinger band increased for the fifth consecutive session and currently outnumbers those that closed over their upper band.
All of the above points to a continuing trend of growing downside momentum. With the equity put/call ratio 10-day average trending higher and the NYSE TICK hitting a fresh 5-day low Monday (triggering the one-day sell signal recently discussed in this October 13th column), it continues to look like the path of least resistance is to the downside.