US equity market, although still in an up trend, is showing weakness again. Technical analysis fans could very easily point many charts showing various divergencies indicating that weakness. Well, I will show just a few of them.
First chart shows the S&P 500 index subsequent peaks with less number of new highs. Though index reaches another record highs, every time it happens we can spot less and less new highs. This is a clear sign of weakness. Declining volume is another sign of weakness.
Another chart.
This chart is especially crucial. It shows what the big money does. I've presented similar chart quite a few tines here but this time I made a small modification. The blue line shows what is happening during the last hour of daily session. This is time when big investors are active. When the blue line is in a down trend it means that big money is selling. And vice versa. Quick look at the chart and we see that since the middle of May the big money has been selling very intensively.
One remark - that indicator isn't a good timing tool - it just shows the tendency. But I wouldn't rather like to be on the buying side when big fishes sell....
Next chart - and this is a timing tool.
The chart shows NYSE advance - decline issues and its climaxes. Without boring details - red circles indicate when the market reached the selling climax and the bounce up is expected. Currently we have such a situation. After the latest short term down trend the market is expected to have some sort of a rally.
Well, we'll see. But the big picture is that the market shows longer term weakness with big investors selling their stocks with full determination. While Wall Street sees only momentum trading the market is loosing that momentum.
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