NYSE TICK Chart

Just to remind you of how much the character of the market is changing (this is important because it is these changes in character, often subtle that lead to changes in trend), last night in the market internals for the first time I can remember in a very long time, new lows outpaced new highs. We have seen the market slowly transitioning from advancers outpacing decliners to decliners outpacing advancers and the breadth chart I posted earlier of the percentage of stocks 1 standard deviation above their 40-day price moving average speaks to these changes. However, last night was unique in new lows outpacing new highs.

In a similar fashion, the NYSE TICK chart is showing another change in character.

It use to be on a decent down day we might get a half dozen TICK spikes to -1000, once in a while a couple of -1250 readings and maybe once a day on a decent decline, a -1500 (the NYSE TICK chart is all NYSE stocks that are advancing per tick less those that are declining-a negative TICK shows more stock declining then advancing); yesterday we saw some serious spikes around the -1500 area, today a major change in character as we have numerous spikes below -1500 and quite a few at -1800 which is a hugely bearish reading that is not often seen. It, like the advancing/declining issues, the new high/new low issues and the dominant price/volume relationship; can create a 1 day oversold condition. I know that doesn't make sense when you look at the SPX and hear, "Oversold", but we are talking about short term conditions that manifest intraday or day to day.

In any case, there's another change in character and a quite bearish one at that. The market is starting to get panicky, a strong bounce would be helpful in getting the market to let its guard down, it's usually at that point when things go south in a hurry (just think about the concept of extreme VIX readings).