Market Internals 2011-06-05
Many asked for an update on the reading of the Daily Breadth Chart. Here it goes.
Since last update,
1. The selloff – checked
2. The bounce – checked
3. The What-If – TICK16 Short Term failed to hold above neutral for even 1 day, so the bearish scenario unfolded
Both 3-Day Advance Issues and TICK16 ST are oversold, on the first uptick on either one we get a bounce of at least 20 to 30 pts.
The better measure is percentage as longer term charts works better relative to percentage changes. Thus I am looking for a bounce of at least 1.5%.
If the bounce is capped at 2% or lower, the market will turning into melt down mode and we get down 8% and then 12% from the highest close quickly.