From the desk of Steve Strazza @Sstrazza and Grant Hawkridge @granthawkridge
As markets remain mixed we continue to see lackluster action from some US indexes even as some others make new highs.
Large-Caps recently charged back to fresh all-time highs, but the Small- and Mid-caps are still facing some serious overhead supply.
As always, we’re snooping around our market internals chartbook to see what’s really happening underneath the surface in these areas, and whether internals agree with the price action in these smaller market-cap indexes. And even more importantly, if they support, or disagree with the new highs in Large-Caps.
We’ll also answer the question: “Just how bad is the recent deterioration in breadth in some of the weaker indexes?”
We have been getting fewer new highs for a while now, but after such extreme initiation thrusts this isn’t too unordinary, and nothing to cause huge concern.
Although, considering the lack of new highs and messy market environment, we are on the lookout for a change in character in internals that would be a cautionary development… And this would come in the form of an expansion in new lows.
So let’s check in on our percentage of new lows indicators across short and intermediate timeframes, in order to see whether or not participation is expanding to the downside. [Read more…]