Technical Stock Market Report

The good news is:  The current weakness is part of a seasonal pattern that ends in a week.

The negatives:  New lows rose on both the NYSE and NASDAQ every day over the past week finishing the week at over 200 on both exchanges.  Those are big numbers.

The chart below covers the past 6 months showing the S&P 500 (SPX) in red and a 40% trend (4 day EMA) of NYSE new highs divided by new highs + new lows (NY HL Ratio), in blue.  Dashed vertical lines have been drawn on the 1st trading day of each month.  Dashed horizontal lines have been drawn at 10% levels for the indicator, the line is solid at the 50%, neutral level.

NY HL Ratio took a sharp dive into negative territory last week.

The next chart is similar to the one above except it shows the NASDAQ composite (OTC) in blue and OTC HL Ratio, in red, has been calculated from NASDAQ data.

OTC HL Ratio also fell sharply.

The Positives

The market is oversold, but this period of seasonal weakness has another week to run.

Money Supply (M2)

The money supply chart was provided by Gordon Harms.

Money supply growth weakened again last week.

Conclusion

Seasonality and the breadth indicators are weak.  Volume has remained low suggesting there has been no panic yet.

I expect the major averages to be lower on Friday November 20 than they were on Friday November 13.

Disclaimer: Charts and figures presented herein are believed to be reliable but I cannot attest to their accuracy.  Recent (last 10-15 yrs.) data has been supplied by CSI (csidata.com), FastTrack (fasttrack.net), Quotes Plus and the Wall Street Journal (wsj.com).  Historical data is from Barron's and ISI price books.  The views expressed dare provided for information purposes only and should not be construed in any way as investment advice.  Furthermore, the opinions expressed may change without notice.