Market Comment
Disclaimer: All charts and comments are intended for education and discussion purposes only. No investment recommendations are being offered. Please do your own research and take responsibility for all investment decisions that you make. Questions and comments related to this post are encouraged. | MON - Sector Strength | TUE - Interest Rates | WED - Market Breadth | THU - Commodities & Currencies | FRI - Market Sentiment | SAT - Bullish Percents | About | contact: HeadlineCharts@gmail.com |
Another bad day in the market. The SPX is decisively below the 200-day which invokes the Faber-rule to be out of the market and stand aside until the SPX breaks back above the 200-day. I am not quite that disciplined to be entirely out of the market, but my holdings are very conservative. I remain about 25% invested in utilities, non-cyclicals, precious metals, but with a hedge of some ProShares inverse funds.
I don't see anything much that is interesting at this point in the breadth, volume or momentum charts. They are all very oversold. New lows continue to be extremely high indicating continued punishing distribution in the market. I thought it might be more interesting to take an early look at the bullish percents.
The only holdouts above the 50% level of the major indexes are the dow industrials and nasdaq-100. It is an impressive showing for an index to have over 60% of stocks on P&F bull signals in a horrendous market like this. And likewise for the SPDR sectors that are holding up as well such as technology and telecom.
At the moment, my guess is that the equity market is rapidly approaching a capitulation selling level and these remaining areas of strength are going down with the rest of the indexes. The remaining areas of strength may be the first to snap back when the market recovers, but they may have to go down before the market bottoms as margin calls, fund redemptions and extreme fear forces unplanned selling.
