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Market internals have been used as evidence for the strength in the market. Market internals however need to be used carefully.

When looking at market internals, both volume and price continue to lag the NYSE Advance/Decline (A/D) line, a metric that continues to hit new highs, but as I explained in a prior column, the A/D line you see thrown around in the media isn’t as significant as it looks on the surface.

At the risk of going on a tangent, head back the article on how the NYSE Advance/Decline line lies to you for a more in-depth explanation. Bottom line here is that in healthy bull markets, all three of the A/D line, price movement, and volume tend to move northward together, and that’s not what’s happening today.

Margin debt is also back towards the highs, another danger sign.

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Earnings remain an issue.

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