Sunday, November 29, 2009

Indicator Update for November 29th

Here we see a few continued signs of market weakness, despite the rise of large cap indexes to new price highs this month. Note how the number of stocks registering fresh 20-day highs vs. lows has tailed off over the last several months (top chart). After Friday's weakness, we're now once again seeing new 20-day lows outnumbering new highs.

As the two charts from Decision Point illustrate, among the particularly weak sectors are small caps (middle chart) and financial shares (bottom chart). If you look at the bottom panes of those two charts, you'll see how the advance/declines lines specific to small cap issues and financial shares have lagged badly in recent weeks.

The stock market shrugged off the Dubai-related weakness rather well in Friday's session, but I'm going to need to see more strength among small caps and financial stocks to tell me that the market's recent correction is over. I will be tracking new high/low data each morning prior to the market open via Twitter (follow here).