(Click on chart to get a larger view.)The above chart shows the structure of the 50 Leaders in relation to the 10-Day, 50-Day and 150-Day Moving Averages.
Unlike the earlier post today, this shows a clear deterioration in the technical picture for the market. It also suggests that more downward movement is likely.
The % of stocks above the 10-Day MA fell to 24% - still above the oversold level of 20%.
The % of stocks above the 50-Day MA dropped to 64%. That's a big drop down from the overbought level of 80% - but in a bull market we would still expect it to drop down below 50% in an simple retracement in that bull market before turning north again.
So, the structure of the 50 Leaders deteriorated, but not enough yet to suggest that a turn-around in the market is imminent.
If we are, in fact, at an inflexion point in the market (and we never know until after the fact) then further low readings are likely and a big fall in the % of stocks above the 150-Day MA would become evident. We'll be watching this closely to see what happens.
Cheers
Red
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