Not a whole lot going on in the markets the last few days. A 9 point move in the SPX is heralded and over-analyzed to death. So let’s step away from all this micro stuff and look at the big picture. I presented a Bollinger Band-Width Study recently and it showed that a sideways market was to be expected. Well, spot on, nothing has changed. So let’s look at where we are now in this uptrend and compare it with the previous. I could have gone back 2,3,4 years back in time, but it doesn’t really matter since all uptrends in the end are corrected. Either with a higher low or a lower low depending on wave degree. Looking at the TI’s the below chart suggest where we are in the uptrend compared to the previous uptrend, assuming history can be used as a guidance (click to enlarge), as well as since both the previous and current uptrend didn’t experience a Zweig Breadth Thrust and could therefore be seen as similar.
If we the look at ZB (see chart below; click to enlarge) and price (the purple line is SPY; 1xETF of the S&P500) we see that breadth has been deteriorating since October 31. This is normal and common in an uptrend; less and less stocks participate, till too few go up and the market goes down (it’s a market of stocks, not a stock market…). Nothing bearish about that for now. But, breadth wise, the current uptrend is comparable to that off where the market was late August/early September which is in line with what the TIs suggest.
Hence, enjoy the sideways market!… 😉 !?