Our market internals are losing strength, indicating a weakening in the position of bulls. We have three gauges to try to judge the internal strength of markets generally.
Our first indicator, CharMeter Asp, is the trading indicator, moving more than the others. We have watched our bullish strength fall from 56% in early July to 40.23%.
The T11D Sunmarry indicator, which is a slower mover, holding to trends longer, is now 53.52% bullish, after having apparently topped at 55.27% on July 7.
We've added a third inciator, M4 Sum, which is an even slower (often 'late') indicator, which is also in a downtrend, bullish issues having dropped from 335 to 324.
These three indicators count issues we follow at bullish and bearish readings to get a picture of the market's strength.
Below we show these indicators in the ETF OIL, which is attempting to change trends from negative to positive. T11D Sunmarry has become positive, as has M4 Sum, but the ChartMeter ASP is resisting at zero.
Our view on this market rally is quite cautious. With internal indicators decaying, and the price of the US Dollar rallying, we don't see any way that stocks will rally at this point, without some outside intervention by the Fed, which seems unlikely at the moment.
This, too, makes us suspicious of the rally in OIL. We think it might not have much kick to the attempted rally.
Michael J. Clark