Just a quick update on the NYSE Bullish Percent readings which have now dropped to 38% from over 45% a week ago. This is not a good development for the bulls. Sentiment has shifted to the negative side now. Forget about trying to throw that long TD pass. Time to play defense.
This comes on the heels of a drop in the percentage of NYSE stocks trading above their 10 week moving average. That number has declined from over 58% to about 45% in the space of one week. In addition, the percentage of NYSE stocks trading above the 30 week moving average has declined from almost 40% last week to about 31%.
Both of these developments are bearish. Also, one must keep in mind that over 2/3 of the stocks listed on the NYSE are small and mid cap names. So that rally we’ve been hearing about in the smaller issues?….It’s evaporating.
The broader market is going down.
Things to do:
1. Reduce exposure to stocks
2. Increase cash position
3. Can continue to hold some stocks in strongly performing sectors, but tighten stops.
4. Sell laggards
5. Use trendline stops on ETFs
6. Use inverse ETFs to hedge.
Disclaimer: This information is not intended to be used solely to make your personal investment or trading decisions. No claims or guarantees are implied by this information or the dissemination of it.
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