Sometimes shifts are dramatic in the market, as we saw off the low. Sometimes they are much more subtle, as we saw, say last September. The subtle shifts take time to develop. Sometimes the shifts take so much time that they work it out and regain the prior pattern and therefore are not shifts but bumps in the road.
Right now we have a subtle shift that began on Monday. It has been my contention that as long as breadth was good sentiment was a concern but not problematic. Breadth began a shift on Monday. It continued on Tuesday. While -500 is not awful breadth, it is a change from what we've seen. For example last Thursday the S&P lost 10 points and net breadth was -700. I thought last week was good. But with the S&P down 2 and breadth -500 that's what I would call a small leak.
But more than that it managed to get the McClellan Summation Index to stop going up. It has not rolled over. It may very well turn back up but Tuesday was the first time since the low it actually stopped going up. That's a subtle shift. Please note if you're wondering why you can't see it on the chart it's because it was that subtle. But know that breadth now needs +100 advancers minus decliners to get this heading back up.
Yesterday I noted that for the first time since the low the VIX closed at the high of the day. That happened again on Tuesday. That's probably why the put/call ratio for the VIX sunk to 18% again on Tuesday. It looks as though folks are starting to bet more heavily on a higher VIX, which if you think about it makes sense since it has closed at the high of the day for two consecutive days.
Another subtle shift is the ratio of IWM to SPY. It was strong off the lows, took a breather for nearly a month (after the market reached the initial overbought reading), had a strong February but in the last two days has given back a week's worth of gains.
Another subtle shift showed up in the Transports. They have made no progress in over a week; they didn't even make a new high on Friday or Monday. There is an uptrend line that comes in around 10,400 but notice this is the only major US Index that never made it back to the December high.
So far none of the indicators have moved but if the subtle shifts keep up the indicators will move. But it takes time.