Wednesday, January 14, 2009

Market Internals Showing Extreme Weakness; Jan. 14, 2009

The market's internals are extremely weak as seen from my Scottrade market insight page above. You can see that NYSE decliners are outpacing advancers 11.5 to 1. Down volume represents a whopping 97% of total volume! Also notice above that of the 500 stocks on the S&P 500, only 16 are trading up today.

This extreme weakness shows absolutely no one is buying at all today. Seeing as that the S&P broke its key level of 850 with internals like this, it's extremely bearish and ultimately confirms that the charge to below 740 is underway. It won't get there in a straight line, and with horrible breadth like we have today, I wouldn't be suprised to see a snap back rally start tomorrow. This is not a prediction, but just acknowledgement.

If we get a major selloff into the close today with the S&P down more than 33 points, then I will take more profits on some of my positions. With such a constant and large decline like we've had the past week, I'd be a fool not to take some profits off the table.

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