Huge breakdown for the Transports, but barely a peep out of the Industrials. It isn’t a good sign for the broad market, and coming at a time when seasonal weakness is just starting.
The short-term trend has probably peaked.
Something was up with the market today right from the open. The bullish percents were all pointing lower.
The Leader List
Strong: Energy, Retail. Weak: too many to mention them all. Transports, Pharmaceuticals broke down below their 50-day averages.
Yesterday I wondered whether this Energy rally was for real. Well this now looks promising.
This doesn’t look good.
Health Care dropped off the leader list.
Semiconductors dropped off the list too, and for the second or third time in the last few months. This index is getting ready for a larger move. It could either be building a new base, or a developing a significant top. My guess is that it is a top.
Outlook
John Murphy has pointed out that it has been a year since the market has experienced a 5% correction so it is overdue for a pullback. He also mentioned that we are entering the risky time of the year for market corrections.
The long-term outlook is positive.
The medium-term trend is up. Watching for signs of a peak.
The short-term trend is at the top of the range. Watching for signs that a downtrend is beginning.
