I’m watching the red and green lines, which are both measures of short-term breadth.
The red line measures the number of stocks trading above their 5 day moving averages, and the green line is a decliners indicator.
The red line could drop a little more before I would be comfortable yelling for a bounce, but the green line is well within the range that suggests a bounce is near.
Bottom line, while I’m expecting more downside soon, short-term breadth is suggesting that the market firms up here. At the very least, I’m looking for some consolidation before the slide-down resumes. The best-case scenario looks to be a small bounce.
These have been good calls lately
Thanks Cheese. With volatility climbing, we are set up for mean reversion to work better than it has over the past year or so.