Are Clouds Gathering for This Market? S&P 500 breadth remains on bearish divergence.
Some more worrying signs appear to be showing in the stock market.
While the bulk of the index charts remain in near-term uptrends, psychology data and valuation continue to be of concern for us.
The charts of the major equity indices saw some weakening Tuesday, with two closing below their near-term support levels while two more registered bearish stochastic crossover signals. Also, the S&P 500 and its percentage of components above their 50-day moving averages are on a bearish divergence as discussed below.
On the Charts
Source: Worden
Insiders Increase Selling Activity to Last March s Levels Charts remain constructive, but some of the psychology levels have intensified their warning signals.
Jan 22, 2021 | 10:39 AM EST
Three of the major equity indices managed to post new closing highs Thursday although these highs were achieved on negative breadth as the FAANG stocks were largely responsible for the gains.
While the charts remain constructive, some of the psychology levels have intensified their warning signals, notably the action on the part of insiders.
On the Charts
The major equity indices closed mixed Thursday with negative breadth on the NSYE and Nasdaq.
The S&P 500 (see above), Nasdaq Composite and Nasdaq 100 managed to post new fractionally higher all-time highs as the rest declined.
We ve Upgraded Our Market Outlook: Here s Why Our discipline requires us to change our near-term view.
Jan 21, 2021 | 11:12 AM EST
With the major equity indices posting new all-time closing highs and the FAANG stocks making notable gains, all the index charts are back in near-term uptrends.
And while psychology and valuation continue to flash their warning signals, the McClellan Oscillators remain neutral. With this current setup, our discipline requires us to move our near-term outlook.
Here s what the charts and data are telling us:
On the Charts
Source: Worden
All the major equity indices closed higher Wednesday with positive internals as virtually every major equity index managed to post new all-time closing high. As such, all are now in near-term uptrends while cumulative breadth remains positive on the All-Exchange, NYSE and Nasdaq.