Friday, September 05, 2008

Divergences Appearing in the Indicator Data

Credit to the Decision Point site, which tracks the common stocks only for the NYSE Composite Index. As the NYSE Composite has moved to 52-week lows (top chart), we see that the number of NYSE common issues registering fresh 52-week lows (middle pane, top chart) has shriveled to only 124 on Friday, compared with around 450 at the mid-July lows. At the same time, the advance-decline line specific to NYSE common stocks has, so far, failed to confirm the new lows in the index (bottom chart, bottom pane). If these divergences continue, I will be looking to be an aggressive buyer of stocks--and probably a seller of the long end of the Treasury yield curve. I'll have a fresh indicator update posted Monday AM.