For the past week the percentage of stocks above their 20, 40, and 200 period moving average continued to drift downward as the indexes hover in proximity to their highs. Beneath the surface a divergence is occurring. It would not be unreasonable to infer that the higher probability at this time is a pullback through time or price. While there is a possibility of continued upside, the underlying issue would remain that the move is composed of limited participation from a dwindling basket of stocks.
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| % Stocks Above 20 Period Avg |
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| % Stocks Above 40 Period Avg |
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| % Stocks Above 200 Period Avg |
Also of note this week is that across multiple time periods the number of stocks making new lows is greater than stocks making new highs. This suggest that selling has picked up and from a swing trading perspective continued patience is prudent.
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New Highs New Lows
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This can also be seen visually when looking at $USHL5.
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| $USHL5 |
On my time frame the prudent speculation continues to be on the sidelines tracking setups, working on my process, and correcting inefficiencies until I see an improving trading environment.
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