+

Cookies on the Business Insider India website

Business Insider India has updated its Privacy and Cookie policy. We use cookies to ensure that we give you the better experience on our website. If you continue without changing your settings, we\'ll assume that you are happy to receive all cookies on the Business Insider India website. However, you can change your cookie setting at any time by clicking on our Cookie Policy at any time. You can also see our Privacy Policy.

Close
HomeQuizzoneWhatsappShare Flash Reads
 

The Stock Market Is Falling Again

Aug 19, 2013, 23:17 IST

This morning, things were pretty quiet in the stock market.

Advertisement

There were no economic data releases, no notable earnings – not much going on in general.

In the last hour or so, though, the market has taken a turn lower, and now the S&P 500 is down 0.3% on the day, trading right at 1650. The Treasury market is also selling off – the yield on the 10-year note is 6 basis points higher from Friday's close, trading at 2.88%.

If these levels hold and the index closes in the red, it will be the ninth trading session of the last eleven in which the index has fallen.

In a note to clients Friday, BofA Merrill Lynch technical research analyst Stephen Suttmeier warned that the sell-off that has taken hold of the market over the past two weeks may not be over yet.

Advertisement

Reflecting on Thursday's trading – the worst session in the recent spate of selling – Suttmeier wrote:

Yesterday’s 1.43% drop in the S&P 500 completed a 1-month top, but market complacency suggests deeper downside risk. Sellers may not be exhausted yet and the following four indicators point to complacency in the US equity market:

  1. NYSE consolidated tape volume of 3.4b shares was slightly above the 65-day average and not at panic volume levels.
  2. The market drop did not qualify as a 90% down day, with 85.4% of stocks down and 74.4% down volume. This is not panic downside volume and breadth.
  3. The daily ARMS (TRIN) was complacent at 0.55. A daily ARMS reading above 2.0 would indicate near-term fear. In fact, readings above 2.0 on June 19, April 17 and February 20 and all were near tradable bottoms.
  4. The 5-day put/call ratio is also complacent and reached the lowest level since mid-September 2012.

The chart below shows today's trading session to the right of the light blue shaded area.

Thinkorswim

You are subscribed to notifications!
Looks like you've blocked notifications!
Next Article