I would love to report that Thursday's trading changed the indicators, but alas they remain either overbought (intermediate-term) or heading down.
Having just reached an intermediate-term overbought, we're not going to be oversold this quickly. With the McClellan Summation Index heading down, and not having gotten extreme yet, it's hard to imagine it will improve enough to turn upward once again in short order.
The Volume Indicator got overbought and I still over 50%. That gets oversold at 47% in bull markets and in bear markets it needs to get to the low 40s.
The number of stocks making new lows expanded on Thursday, as well. You can see the New York Stock Exchange's new lows is now closing in on the level of new lows it saw in late March and the S&P is still two hundred points higher than it was then.
Nasdaq's new lows increased, but not to a great extent, although there are still more new lows than there were a week ago.
If you want me to make a bull case, then I'll note that the Russell 2000 closed at the lowest level since October and so if we compare the number of stocks making new lows to March when the Russell closed at 1720 (it is now 1718) then there are fewer new lows (by about 200). If we compare it to late December when the Russell closed at 1722 then the number of stocks making new lows was just over 500 then and so there are fewer now.
Yet take a look at the breadth of the market using Nasdaq's volume. Nasdaq itself is kissing the recent highs (brown line) while Nasdaq's volume (up minus down) is kissing the recent lows (blue line). That tells me that more and more money is going into fewer and fewer stocks, which I noted the other day can go on for a long while but is not healthy.
Yesterday we looked at the low level of bears in the Investors Intelligence survey. Today I would note that the bears leapt to 44% in the American Association of Individual Investors' weekly survey. I have often said the AAII is not a good guide, unless it is confirmed elsewhere. Obviously it is unconfirmed when it comes to the II poll.
Now we have the National Association of Active Investment Managers (NAAIM) who lifted their exposure this week from 50 to 64. Another non-confirmation with AAII. I have no doubt that sentiment -- post the Fed meeting -- will get bearish in a hurry but it hasn't done so yet.
Both Nasdaq and the S&P have been red for four-straight days, something neither one has done in months. We have to go all the way back to 2022 to find a time either one went five in a row so I wouldn't be surprised with a rally on Friday, but I still think we are not yet done with the volatility I have been looking for.
