Is the Market Technically Broken?

Hedge fund liquidations. Mutual fund redemptions.

The NYSE Composite brokedown through the July lows and is trading at it’s lowest levels since July 2006.

Oil prices have dropped, but transports and refiners are trading lower. What’s up with that?

Yesterday, the NYSE had 62 issues rising on their PnF charts and 604 falling. There were 3 new buy signals and 60 new sell signals. Upside/downside reversals were 21 to 184.

The Naz had 78 names rising on their PnF charts and 543 falling. There were 5 new buy signals and 40 new sell signals. Finally, 25 stocks exhibited upside reversals and 180 reversed downward.

Crushing.

Still, sentiment is bullish according to the readings on the NYSE Bullish Percent, which is at 44.72%. Keep in mind that this indicator is broad based and filters out a lot of the “noise” and volatility in the markets, looking at sentiment strictly from a supply/demand standpoint for stocks. Last week, it was at 43.7%. Based on the current readings, a confirmed reversal in sentiment will occur on a drop down to 38%.