As you can see from the chart above, after today’s sharp drop, new 20-day lows across the NYSE, NASDAQ, and ASE are now outpacing new highs rather handily. On Monday, the new lows hit a level they haven’t seen since the March bottoming period. I notice that new 65-day highs and lows are now about even. This fits with the pattern of market weakness–and the trend shift–noted in the recent indicator review and update of the sectors. Seeing the market weakness setting up early in the morning, as noted in the intraday Twitter comments, and placing that weakness in the context of a trend shift was helpful in anticipating our break of last week’s lows. It’s a nice example of how placing short-term strength/weakness in the context of longer-term market activity is useful in anticipating moves to and through key price levels.
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With the S&P 500 Index e-mini futures market (ES) unable to hold above the 915 level stressed last week, we’re now seeing selling toward last week’s lows, continuing the market’s trend shift. We also continue to see intermarket themes dominate: the strong U.S. dollar versus the euro and weak commodities accompanying stock selling. Meanwhile, the Market Delta chart shows that we’re building volume overnight in the 908-909 level, with the volume-weighted average price higher at 911.50. Inability to rally above those levels will target last week’s lows below 900.
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