Last week's indicator review
found a stalling out of the market bounce since mid-July, with fewer
stocks registering fresh new highs and only modest advance-decline
strength among NYSE common stocks.
Recent sector behavior has shown signs of rotation, rather than trending, which is consistent with
continued weak money flow readings.
As a result, the new high/low balance (middle chart) remains stagnant,
even as we returned to relatively overbought levels (top chart) before
falling back on Friday. The advance-decline line (bottom chart; kudos
to
Decision Point) tried breaking to the upside midweek, but fell back into its multi-week range with Friday's drop.
With
falling commodities and a strong U.S. dollar, stocks are finding some
support; U.S. equities have been relatively strong compared with many
global counterparts, particularly in Asia. Still, the weak money flow,
lack of consistent trending across sectors, and modest new high/low
strength have me questioning the upside, particularly if we make new
price highs without meaningfully expanding those indicators.
