Stocks Are Rolling Over; Volume Picking On The Downside

At the moment, this confirmed market rally starting in late in the summer is fading very quickly.  For the second day following labor day, stocks ended the day in red and in higher volume.  This is a troubling sign for stocks, indexes can stack up distribution days very quickly and can roll over just as fast.  All trend lines are now pointing downward and volume is beginning to creep up on the downside.  Simple price and volume action is alerting to market participants that its not to be messed with.

Now you have some previous leaders beginning to stumble:  Apple (AAPL) and Baidu.com (BIDU), not to mention the high flying Ag stocks, are now broken:  Agrium (AGU), Monsanto (MON), & Potash (POT).  The market waters are terribly murky at the moment, it’s best to stay on the sidelines and dry.

New Lows pounced on New Highs once again establishing the weak are taking this market down and fast.   Ideally, New Highs should be killing New Lows as new leaders in the market are emerging.  Sadly, we have very little if any leadership in the market (Medical) and without leadership, we will go nowhere.  In addition, NYSE ratio continues to hit new highs.  Now, I don’t consider this to be a contrarian indicator with the advent of ETF who seek 2x the inverse of a particular index or group.  They have to use shorting techniques and other instruments to achieve that goal.  At any rate, what it does tell us when we turn and get a new bull market it will be very powerful.  Its a silver lining in this bear market cloud and its something I am looking forward to with all the cash on hand.

Cash is King and Enjoy!

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