What was different in the market on Thursday? Well let's see.
We can start with bonds, since there is really something shifting here in terms of what we have seen for most of the year. I know I seem obsessed with interest rates. That I still think rates are mostly in a sideways area right now means, perhaps, I am fussing too much, but pardon me while I fuss some more.
Interest rates were down Thursday. Banks were up and tech and growth stocks were down or chopped. A month ago, that was not the case. Three months ago, that was not the case. Heck, since February, that has not been the case. So why did banks go down on Tuesday with rates higher and up on Thursday with rates lower?
I don't have the answer, because I prefer to wait for others to provide the narratives, but clearly there is a change in the pattern.
Speaking of changes in the pattern, we now have four straight down days for the S&P. I know, we're not even looking at a 1% decline, but we haven't gone to four since mid-June, which tells me there is a pattern change from what we saw all summer. Keep in mind we haven't seen five red in a row since February, so if that happens, that would be a much bigger change.
Elsewhere we have breadth that was flat. We have the Dow Jones Industrial Average still sitting at that uptrend line (always use a thick pencil). And we have the number of stocks making new lows holding steady, not rising.
We have the transports acting poorly and threatening to make a lower low. And we have the McClellan Summation Index heading down, but a day with breadth at positive 800 or better will change that right back to up. That means we've not seen a major change in any of the indicators all week.
The exception is that the Overbought/Oversold Oscillator has come down from that extreme overbought reading we headed into this week with. It's hard to put a finger on exactly when we would get to a good oversold condition right now, but if we can get a few days of negative breadth -- say three of the next five days -- we'd have a market oversold enough to rally later next week.
Sentiment to me is mixed. I'd love it to be more cautious/bearish, but it isn't. I think it feels as though folks are mostly frustrated. Their beloved tech stocks have stalled and churned so it's hard to latch on to that. Banks, energy and industrials are all down this week so there's no joy there. And the drug stocks everyone loved a few short weeks ago? Well they took it on the chin this week.
If we can get a bit more downside next week perhaps sentiment sours enough by the time we get back to an oversold condition.