We observed on April 21, that the stock market was actually stronger than the S&P 500 (NYSEArca: SPY) chart led to believe (Article: Under the Hood is more Strength than the S&P 500 Chart Shows).
Subsequently, the S&P 500 moved to a new all-time high on April 27 (2,126.92).
However, this condition of underlying strength quickly morphed into underlying weakness.
The April 26 Profit Radar Report observed this: “Interesting, 1-2 weeks ago, the percentage of NYSE stocks above their 50-day SMA was actually higher than the S&P 500 chart would suggest. Now, the percentage of NYSE (and S&P 500) stocks above their 50-day SMA is visibly lagging the new all-time highs. RSI is also lagging.”
The chart below shows that bearish divergences between the S&P 500 and the percentage of NYSE stocks above their 50-day SMA tend to lead to weakness (only 2 out of 8 corrections…
View original post 366 mots de plus