Charts and Commentary
Once in awhile, I share some of our proprietary models that we provide our paid subscribers. This morning, I will share our summation of Buying Intensities and Selling Pressures for all the indexes added together.
The Buying Intensity measures the trend of the stocks that are trending in a positive direction, and the Selling Pressure measures the trend of stocks that are trending in a negative direction. As the number of stocks in each group increase or decrease, each of the indicators trend higher or lower.
Obviously, for a strong new rally, Buying Intensity should be trending up, and Selling Pressure should be trending down. The opposite is true for a market that is losing strength, pulling back or correcting.
Today's chart shows that Buying Intensity took off in October and peaked in early January. Since then, it has moved down into a trading range with great volatility which represented consolidation and a lot of sector rotation occurring.
What is important to observe, is that the Selling Pressure started trending up at the end of January and has been increasing since that time. This means that the trend is increasing for more and more stocks going into a distribution condition.
Together, they show a trend of deteriorating market strength since January. This correlates with higher risk levels in the market and the danger that ... if both continue trending negatively, that the market will face trouble ahead.
Please Note: We do not issue Buy or Sell timing recommendations on these Free daily update pages. I hope you understand, that in fairness, our Buy/Sell recommendations and advanced market Models are only available to our paid subscribers on a password required basis. Membership information.