Monday, June 12, 2006

Market Update

Just a few notes from Monday's trading that might be of relevance. We continue to see broad market weakness. For instance, there were 5 issues in the S&P 600 small caps making new 52-week highs on Monday and 33 making new lows. That is the highest number of new lows since the recent weakness began. In the broad market, 315 issues made 20-day new highs; 1732 made new lows, indicating that last week's late bounce has not kept many issues off their lows. I notice that about 23% of S&P 500 stocks are above their 50-day moving averages. Typically, in the past several years, we've had to get below 20% to reach an intermediate-term market bottom. In all, plenty of reason to stay defensive.


John Wheatcroft said...

I've been watching the Chaikin's oscillator and it seems to be indicating that the down trend is being supported by less and less volume. I watch it in relation to its excusion from its 5 day SMA. Extremes (20+ points) seem to indicate a change in direction and it has been going extreme for a couple of days now.

Brett Steenbarger, Ph.D. said...

Thanks for the observation. The question is whether, like most oscillators, it can *stay* extreme over extended periods of time during strongly trending markets. This is why I focus so strongly on the number of issues making new highs/lows. If those figures are expanding, I have much greater doubt that the trend is ending.


anthony thompson said...

Where are the numbers of stocks reaching new highs and new lows published?

Brett Steenbarger, Ph.D. said...


You can find high/low stats at the and sites, among others.