Zweig Breadth Thrust and 4wk New High/Low Ratio moved up slightly today to 59.50 & 89.68, respectively so these are hanging just below their extreme overbought levels. I have no idea what’s going to happen tomorrow, but if the markets should rally then these two will doubtless hit overbought levels. There has been the potential for such readings for the past three sessions but nothing has come of it yet so we’ll just have to see.
Stealth Distribution: Today $NYA was up 19.28 pts on good volume and yet the $TRIN closed at 1.17. This is stealth distribution. In fact, the $TRIN was sitting in the 1.30’s and 1.20’s most of the session so while all the majors closed green today, some entity was quietly unloading shares at just the right amount to keep the markets from falling off a cliff.
This could be nothing. Just a one day event. In true Stealth Distribution you would watch for three or more such days spread out over 5-6 sessions. But this market is like none I’ve ever seen so one day may be enough to tip the scales to the south.
Chart of $SPX showing it riding nicely above my preferred trend lines. Did not close above 1296.48 to confirm the ADX ‘buy’ signal, but didn’t close below 1285.41 to confirm yesterday’s dragonfly doji as a reversal candle. Interesting that we’re sitting below the important voodoo psycho round # of 1300. Hmm.
$SOX Index: In the 60min time frame, the RSI for $SOX has been above 70 all week. This means that this key index is very overbought and could reverse at any time. TXN appears to be the driver behind this and its RSI in the 60min time frame is at 81. This is not sustainable. Period. TXN doesn’t report until the 23rd and I don’t see how the current move can last that long. If TXN should start to pull back, which it ought to, then the $SOX will do the same and if the $SOX starts to pull back then so will the $COMPQ.
And of course my concerns could be totally misplaced and the $SOX and TXN are just going to head to the moon and beyond. Just watch them and see what happens over the next few sessions.