Market Sentiment: Breadth rout

The bullish divergences which were developing for the S&P have taken a slap across the face and now look set to align at a slower pace. Unfortunately, the NYSE Summation Indec is caught in neutral territory, some distance off the lows of November 2008. It by no means has to fall to those levels, but a break below -1,000 feels like a minimum requirement.

There is a little more strength in Nasdaq breadth and it will be interesting to see if it can pick up some support. Again, the Summation Index favours further downside but there is a definite bullish divergence between large cap and tech stocks.

Dr. Declan Fallon, Senior Market Technician, the free stock alerts, market alerts and stock charts website

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