Do you remember when investors were nervous and scared because iShares iBoxx High Yield Corporate Bond fund (HYG) and SPDR Barclays Capital High Yield Bond fund (JNK) were going down? Now no one even talks about these two exchange-traded funds that represent the high-yield market anymore.
So, let's take a peek, because as you can see HYG (and JNK, not shown, though) both had rough days. Now nothing has broken, not even a lower low can be found on the chart, but HYG hasn't made a higher high in almost a month.
Now let's revisit another chart that I've shown here lately: The iShares MSCI Emerging Markets exchange-traded fun (EEM) . We got the oversold bounce (off that downtrend line), but will it stall out or will it keep going? Remember a stall out and turn down has been bearish all year. A continued rise has been bullish. The green box shows periods of pullbacks and higher highs. The blue boxes show lower highs and turn downs.
As for Tuesday's market, it seems we're back to the chop mode. The Russell 2000 did manage a rally, but oddly that did not help breadth, so we had yet another day of crummy breadth. None of these crummy breadth days on their own are so bad, but all together, seven of the last 10 trading days have had red breadth, so it's a lot of leakage.
It's forced the McClellan Summation Index to continue on its downward path. This indicator, which tells us what the majority of stocks are doing now, requires a net differential of positive 1,100 advancers minus decliners to halt the decline. That's quite a bit, since the markets are at highs.
Then there are the stocks making new lows. The 10-day moving average for Nasdaq is now over 100. Again, we are at new highs, so this reading should not be triple digits. The issue is that the NYSE is now playing catch up on that score. Tuesday's market saw 97 new lows for the NYSE. This is the most we've seen since the October lows when the S&P was almost 300 points lower.
Notice on the chart that it is unusual for the new lows to rise while the market is still climbing. They ought to start rising when the market rolls over. That's why this is a problem for me.
Now there was a bit of good news. The put/call ratio zipped right up over 100% for the first time in a week. Why is that good news? Because it seems the longer we mill around and stall out, the more bearish folks become. Thus it means the complacency evaporated on Tuesday -- at least for the day.
Here again, the problem is that the 10-day moving average of the put/call ratio is just now coming off a low, so we'll need several more readings like that to get the indicator to move to the top of the page. When it's at the top of the page, it shows a high level of anxiety -- or fear.
I will end by noting that the Daily Sentiment Index (DSI) for the Volatility Index is now at 8. Typically once a reading gets to single digits, we're at an extreme.
Despite the few positives I have noted, I remain the girl at the party with nothing but complaints. I will gladly change if the indicators change. So far they haven't.