• Another distribution day.
  • In last few days the market has had a breadth climax.
  • Breadth on MM indicators reached extreme readings.
  • Such extreme readings invariably result in a pullback/correction/long term tops.
  • At this stage the selling is still slow.
  • But I see market struggling here.
  • If you see the top 20 stocks by dollar volume in 4% breakout, you would notice that large stocks have started to roll over.
  • We are looking at a possible top for this rally.
  • A 10 to 15% correction is a possibility from here.
  • Emerging market looked cooked and primed for a drop.
  • As long as the primary indicator is bullish I am still bullish.
  • If the 10 day cumulative breadth ratio goes below .5, I will be bearish.
  • At this stage I would still buy a EP with good catalyst.

Market Monitor
Market monitor is market breadth
based market timing tool
Current Readings
A short term top being formed
Earnings season currently on

Type IndicatorValueComments
Daily# of stocks up >4% on high volume87
Daily# of stocks down>4% on high volume 325
Primary# of stocks up >25% in a quarter2103
Primary# of stocks down>25% in a quarter316This has come back above 300. Below 300 indicates
that breadth is at an extreme.
Secondary # of stocks up> 50% in a month75At extreme level. If you see the period
between 2nd April to 13May, you will see
that this indicator went above 100 couple of time.
You will also see during that period 2 to 3
big selling bursts.
Such extreme readings are not sustainable.
Few days ago it was at 172.
Secondary # of stocks down>50% in a month2
Secondary # of stocks up>25% in a month525
Secondary # of stocks down>25% in a month9
# of stocks up>13% in 34 days2681
# of stocks down>13% in 34 days572
MMA+% of stocks in confirmed uptrend71This is in bearish territory.
MMA-% of stocks in confirmed downtrend 11
10 day
#of stocks up> 4% in last 10 days/
#of stocks down>4% in last 10 days
1.89A reading of below 0.5 on this
will confirm bearish trend.