Chart o’ the Day: Worst Market Participation Since October 2007

Oppenheimer Asset Management’s technician Ari Wald believes that we could be in for a correction within the context of a continuing bull market. His base case is that the leadership groups within the market (healthcare, financials, select tech) do not crumble even as the laggards in energy and materials drag the averages lower, temporarily.

That said, one of his charts this morning rings the same negative breadth bell you’ve been hearing from other technicians. Last night I shared an ominous chart documenting the recent surge in 52-week lows for S&P 500 stocks from BAML’s Stephen Suttmeier. Ari is focused on “participation” in the uptrend among S&P 1500 names (includes small/mid caps) and compares the S&P 500 price index to the NYSE advance/decline line. You can see how the underlying stocks continue to fall off as the price trend flattens.

You can click to embiggen this bad boy:

Screen Shot 2015-07-27 at 10.29.03 AM

 

Josh here – some caveats before this stuff sends you into a panic:

As I’ve repeatedly pointed out, we’ve had several instances in the last few years where technical and breadth divergences ended up being resolved to the upside. If you bought at those moments since 2012 where we’ve had a spike in stocks below their 200-day moving averages, for example, you ended up buying the dip for the overall market pretty flawlessly.

And, as always, price is the most important indicator, regardless of what its derivative indicators (like internals) may have to say.

Source:

Technical Analysis: Inflection Points
Oppenheimer Asset Management – July 27th 2015

Follow Ari Wald on Twitter! 

Read Also:

The Rally is Rotting from Within (TRB)

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. Sell Dumps With Pin Online commented on Sep 27

    … [Trackback]

    […] There you will find 51366 more Info to that Topic: thereformedbroker.com/2015/07/27/chart-o-the-day-worst-market-participation-since-october-2007/ […]

  2. bitcoin loophole in kenya commented on Sep 29

    … [Trackback]

    […] Read More on on that Topic: thereformedbroker.com/2015/07/27/chart-o-the-day-worst-market-participation-since-october-2007/ […]

  3. replica watch commented on Dec 17

    … [Trackback]

    […] Read More on on that Topic: thereformedbroker.com/2015/07/27/chart-o-the-day-worst-market-participation-since-october-2007/ […]

  4. diamond painting kits commented on Dec 29

    … [Trackback]

    […] Find More Information here on that Topic: thereformedbroker.com/2015/07/27/chart-o-the-day-worst-market-participation-since-october-2007/ […]

  5. CI CD commented on Jan 15

    … [Trackback]

    […] Read More to that Topic: thereformedbroker.com/2015/07/27/chart-o-the-day-worst-market-participation-since-october-2007/ […]

  6. Haicom GPS receiver modules manuals commented on Jan 18

    … [Trackback]

    […] Read More on that Topic: thereformedbroker.com/2015/07/27/chart-o-the-day-worst-market-participation-since-october-2007/ […]

  7. human hair wigs commented on Jan 20

    … [Trackback]

    […] Information to that Topic: thereformedbroker.com/2015/07/27/chart-o-the-day-worst-market-participation-since-october-2007/ […]