Over the past week, my core market health indicators didn’t move much. They continue to bounce around with the market.
One thing of concern is that a few measures of breadth are starting to show some weakness. Last month I highlighted the decline in the ratio between the S&P 500 Equal Weight Index (SPXEW) and the S&P 500 Index (SPX). It is still warning of a move to mega caps. The cumulative advance decline line for NYSE (NYAD) is now giving a small warning. The small dip in price for SPX caused a lot of damage to NYAD. The longer this indicator goes without making a new high the more serious the warning will become. I don’t get concerned until it diverges for two or three months so this is something to watch, not something to worry much about.
Another measure of breadth comes from Trade Followers Twitter sentiment. The count of bullish stocks diverged from price just before SPX moved to 2400. As the market tries to move higher again the bullish count is still declining. This indicates that traders on Twitter aren’t aggressively buying the most bullish stocks. Another small warning.
I’m seeing small warnings that are starting to pile up. But nothing serious yet. I’m in wait and see mode.