Internal combustion – anatomy of a stock market top
“Over the past few months, we have detailed the systematic deterioration in the internals of the stock market. This trend recently reached depths historically seen only near major market tops. . . This piece covers the ‘internals’ of the stock market. Internals (or breadth) refer to the level of participation among stocks throughout the entire equity market. It includes metrics like the number of stocks that are advancing versus declining, the amount of volume in advancing stocks versus declining stocks, the number of stocks that are making new 52-week highs versus new lows, etc. In our view, strong internals, i.e., widespread participation among stocks, is an important ingredient of a healthy market.”
MK note: In this in-depth article Dana Lyons tells us why in the coming weeks and months the stock market might move south in a preordained fashion no matter the news – good or bad – based on the underlying fundamentals.
Richard Russell in a recent King World News interview:
“One thing I learned from Dow Theory is that once the primary trend starts its course, nothing will stop it. The primary trend of China and the world economy has turned negative, much to my disappointment. I believe the primary trend of the stock market and the economy has also turned down.”