Market weakness not a surprise | stockbee

8/21/2015

Market weakness not a surprise



Breadth was weak for weeks and market had struggled to improve breadth for months. Yesterday was  big down day in breadth . Readings of 500 plus on 4% are rare and indicate broad based selling.

Breadth can help you calibrate your approach to swing trading by giving you a roadmap to manage risk. Negative breadth readings tell you to be extremely selective on long side and tell you likelyhood of follow through will be low.

Extremely bullish or bearish breadth suggest turns. We are not yet at extreme readings so any counter trend rally will not likely stick and will be used by shorts to establish positions.


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