Stealth distribution occurs when there are about 3-5 days where the market rallies and yet the $TRIN closes above 1.xx indicating that the Big Boyz are quietly leaving by the side door. The days do not need to be consecutive, but a couple usually are. Please type Stealth Distribution into the search box and you will pull up a couple of posts from late April and early May when we had the last instance of this.
These are the numbers from late April:
April 25th, $SPX closed at 1390.69, up 18.72 pts. $TRIN closed at 1.02
April 26th, $SPX closed at 1399.98, up 9.29 pts. $TRIN closed at 1.09
April 27th, $SPX closed at 1403.36, up 3.38 pts. $TRIN closed at 1.58
Also noteworthy during this period, $NYMO tagged its upper BB on April 26th, and then pushed one point above the upper BB on April 27th. And Zweig Breadth Thrust pushed slightly above 60 to 60.20 on April 27th.
After pushing slightly higher on May 1st, the markets began the roll that lasted until June 6th.
But that was then, and this is now.
The last two trading days we have $TRIN closes above 1.xx, 1.06 on Friday and then 1.40 today. $NYMO with BB’s is now 5pts below its upper BB and Zweig Breadth Thrust has been above 60 for the last two sessions. Also, $NYSI rose by 85pts today which is a climax buying signal.
To me this is a red flag but we would need to have a 3rd day with these high $TRIN readings as well as a nice green market close. With tomorrow’s shortened day, I would have to discount just about everything that happens; however, should we have a nice green day on Thursday with another high $TRIN reading then that’s another thing.
The last time we had Stealth Distribution I was on the fence because market technicals looked pretty good. If we get a third such instance of Stealth Distribution before the week ends, then that will put me on high alert.
Just be careful and watch the $TRIN for the next few days.