Tuesday, September 09, 2008

Cumulative NYSE TICK: A Look At Short-Term Sentiment

Stocks have been all over the board the last couple of days, but the Cumulative NYSE TICK (blue line above) picked up on today's weakness from the outset, moving to fresh September lows. This tells us that, even in the wake of the enthusiasm over the Treasury Department's announcement regarding the bailout of FNM and FRE, traders in the broad market continue to hit the bids and exit stocks. Today's action was particularly significant in that we finally saw aggressive selling among housing and financial shares. New 20-day lows soared to 2200, with 658 highs--a sign of the breadth of the selling pressure. Perhaps an even more dramatic example of the day's weakness is the observation of Trader Mike: 42% of the stocks on his watchlist were down more than 5% on the day! That certain qualifies as a "give-up mode", to quote Kirk's recent post.

Until we see traders willing to lift offers, it is premature to act on the divergences noted in my recent indicator update. Meanwhile, note that the S&P 500 futures (pink line above) are knocking at the door of both recent and July lows.