What is market breadth telling us

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	Indicator	Value	Comments

Daily	# of stocks up >4% on high volume	87
Daily	# of stocks down>4% on high volume	325
Primary	# of stocks up >25% in a quarter	2103
Primary	# of stocks down>25% in a quarter	316	This has come back above 300. Below 300 indicates that breadth is at an extreme.
Secondary	# of stocks up> 50% in a month	75	At 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 month	2
Secondary	# of stocks up>25% in a month	525
Secondary	# of stocks down>25% in a month	9
Primary fast	# of stocks up>13% in 34 days	2681
Primary fast	# of stocks down>13% in 34 days	572
MMA+	% of stocks in confirmed uptrend	71	This is in bearish territory.
MMA-	% of stocks in confirmed downtrend	11
10 day cumulative breadth ratio	#of stocks up> 4% in last 10 days/ #of stocks down>4% in last 10 days	1.89	A reading of below 0.5 on this will confirm bearish trend.

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