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- Is Stock Market Readying to Bounce?
Is Stock Market Readying to Bounce?
A Choppy Bounce in January?
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Today, we will try to assess the stock market's internal health after a month-long correction.
S&P 500 Technical Analysis
NYSE Adv/Dec Line was leading SPX correction in December.
NYSE Adv/Dec Line is now stabilizing vs SPX.
Time for a bounce in the stock market soon?
US Stock Market Internal Health
New Highs minus New Lows (upper figure) is still rapidly declining, which is creating some fear in the stock market.
New Highs minus New Lows have been declining since October, but a few large-cap stocks held the market until early December.
But the volume in raising stocks started to exceed the volume in declining stocks, as depicted by the McClellan Volume Summation Index. Green shoots?
Notice that McClellan Volume Summation Index leads New Highs minus New Lows.
Fear & Greed Index
CNN Fear & Greed Index has been hovering above extreme fear for a few days.
I would prefer it to dip into the extreme territory, and one more down day may do it. But it is not required – There is enough pessimism for at least a short-term bounce.
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