Coolhand's Market Analysis

Originally Posted by coolhand

The bears broke through support today and price closed well under the 50 dma on both charts.




We can also see that price closed off the lows of the day. That may not mean much in the context of a bearish NAAIM reading. Momentum accelerated to the downside. Volume was up. I was asked if a switch has been flipped. I was not ready to embrace that notion the way I did over a year ago, but yields are now rising and so is inflation. Those can be switches all by themselves.



Cumulative breadth fell again and is in a slow downtrend. It hasn't gotten serious, but if the sellers jam the exits it could fall much quicker.

NAAIM came in bearish today; at least in the short term (a week). They are shorting more than they were so I don't think the downside is over.

I am now bearish along with the smart money. The bulls may mount another run to the upside, but momentum now favors the bears. I suspect the bottom is not in and could be several percentage points further down.