S&P Index Weakness Unusually Broad

This excellent chart from Decision Point shows advances and declines specific to the S&P 500 stocks. Notice that we are making fresh bear market lows in the SPX A-D line (bottom pane) and that 13 of the last 15 trading sessions have had more declining stocks than advancers. Moreover, four of the past 15 sessions have seen more than 400 decliners of the 500 SPX stocks--unusually broad weakness.

The situation is very similar among the S&P 400 midcaps and the S&P 600 small caps: the A-D lines are at bear market lows and declining stocks have swamped advancers for three weeks running.

Comments

[Big K:]

Get used to declines swamping advances. There is no bottom to this market as the S&P500 has little value, and expect to go below 100. Mass bankrupcies in corporate America and 50+% unemployment are just around the corner. It looks like the worst case scenario, perfect storm, is actually what we are going to get. Was it a self-fulfilling prophecy? Media talking wonks said how bad things are going to get, the new president said things will get worse and may never get better. Our leaders said we have much to fear. All those companies that received federal bailout money are failing anyway. Now, things are bad, and the spiral down to oblivion has started and is gaining momentum like an unstoppable freight train. Prepare for the horror show to come!

Mar 05 11:36 PM

[Jonny Rotten:]

>> Prepare for the horror show to come!

No ... don't sugar coat it. Tell me what you really think is going to happen.

Mar 05 11:59 PM

[X-15:]

God Save the Queen !

Mar 06 12:08 AM

[Fighting Yoda:]

S&P 500 going to 500 (at least). Estimates on '09 earnings range from $35 - $65, consensus around $50. Bear market multiples range from 6 -10. Applying a very high 10 x 50 = 500.

Still time to get out.

Mar 06 12:48 AM

[Moon Kil Woong:]

My guess is it looks like mutual fund capitulation. Generally, only mutual funds dump heavily across the board.

Mar 06 01:39 AM

[Fabien Hug:]

We all thought this was going to be a glitch (albeit big) in an bull market. Now it seems that we are in for a long time. What surprises me after the fact, is that there was so few bearish comments and predictions in blogs available to the public. We always hope that things are going to turn for the better. I personally can't play short. Too bad.

Mar 06 08:51 AM