Monday, September 17, 2007
Here are two daily line charts which show the daily count of the number of issues traded on the New York Stock Exchange which advance in price. On the first chart the pink line is the 5 day moving average of this number. On the second chart the wiggly red line is the 10 day moving average of this number. I last commented on this indicator here.
You can see that both the daily count and its 5 day moving average have been moving downward since late August even as the market averages have rallied. The 10 day moving average shows the same behavior. I regard this as a significant bearish divergence and I think it portends a drop to about 1420 in the S&P futures and 141 in the Spiders. After this break I shall be expecting a move to new bull market highs.