Saturday, October 18, 2008
Not Much of a Bounce So Far
Although we had a very healthy bounce off the market lows, that was soon erased by follow-up selling last week. As a result, the advance-decline line for NYSE common stocks only, as tracked by the excellent Decision Point service, has barely lifted off its lows (bottom pane, above chart). On Friday, we had only 37 new 20-day highs on the NYSE, against 383 lows. The previous day, we registered 21 new 20-day highs on the NYSE against 487 new lows.
Among the 40 stocks in my basket that are evenly divided among eight S&P 500 sectors, none qualify as being in uptrends by my Technical Strength measure, three are neutral (MO, JPM, WFC), and the rest are in downtrends. Quite a bit of technical damage has been done to this market; it's going to take time--and greater follow through in buying interest--to reverse that.