For weeks on end I have reported that the indicators haven't changed. The S&P could rally and they didn't change. Nasdaq could soar and they didn't change. The Russell could rally or decline and still the indicators didn't change. Most indicators were heading down, while sentiment was getting giddy or giddier.
Then, the last few weeks began to see a minor change. Sentiment had gotten more concerned as the patterns of the market changed. Despite the rally on Monday, the indicators have not changed. But there was one statistic that did change, and I think it is worth noting.
Upside volume as a percentage of total volume on Nasdaq topped 85%. I often use 90% as the line in the sand when it comes to downside volume. A big decline where 90% or more of the volume is on the downside tends to represent a clean-out, a reset, a way for the market to move forward. We don't often see many days with 90% of the volume on the upside. And we haven't.
Yet, Monday saw 85% upside volume for Nasdaq. It hasn't seen levels that high since March 24 and April 6. I could show you the chart of Nasdaq, but we all know that the big-cap stocks don't generate that sort of statistic; rather it takes a heckuva move in the down-and-outers to generate that sort of statistic. For that reason take a look at Russell 2000 small-cap fund (IWM) .
The green arrows are those two dates, March 24 and April 6. After the former, we rallied for two more days before giving almost all of it back. For the second date we had what appeared to be an ugly reversal day the next day, but in essence we saw the rally last three more days before giving back about half that leg of the rally.
I grant you the market is in a different place right now, and, yes, the market overall lifted for months thereafter. But one thing was clear: There was continued volatility after that. You can't see it on the chart of the Volatility Index, because the VIX had gotten so high in March, but it wasn't straight up, as you can see from the chart.
Perhaps we are finally witnessing the real shift from growth to value. But one thing is for sure, the down-and-outers had their day in the sun on Monday. And they did so at the expense of growth stocks.