Market Update for 11/10/06

We came into the day on Thursday with a bit of a bearish bias, as noted in the recent posts, and, indeed, the sellers came out in the afternoon. Altogether, we saw 1159 stocks make fresh 20-day highs across the major exchanges and 618 register new lows. This continues to be a source of concern; it is a much higher level of new lows than we typically see near market peaks and suggests possible distribution among shares. My Demand measure, reflecting the number of stocks trading above their moving average volatility envelopes, was 44; Supply (index of stocks trading below the envelopes) was 89. This suggests continued weak momentum among stocks. If you check out the Weblog and the link to the Adjusted TICK, you'll see that the recent rise has been very unimpressive in terms of buying pressure. We're in a trading range between, roughly, 1380 and yesterday's highs. Unless we can establish greater buying interest, momentum, and strength, I will continue to view this action as part of a topping process. My next full Weblog update will be Sunday.