NYSE A/D Underlying Advance/ Decline is in poor Structure.
The aggregate behavior of stocks within the Comp,
the broadest measure of relative Strength to confirm
the trend is near the lows again.
September brought tax-loss selling, it arrived early this year
with several follow on Distributions.
What is very different into the close of 2021 - while Equities
vulnerable to tax-loss selling, on balance performed roughly
in-line with Equity Reference Baseline - the S&P 500: the selling
was broad-based among the Small to Mid-Cap Producers.
Largely, the indices were held up by extreme concentration
within the 7/11 Equities.
No one bought "Deep Value" - it was sold wholesale as Risk
was adjusted to CASH. The losers were not simply sold, as
selling was a widespread panic masked by select Large Caps.
ADDN trade ideas
Advance Decline Signaling Key Divergence - SP500 *Remember to like, follow and share
The advance decline difference is signaling that fewer and fewer stocks are participating in this most recent stock rally, in other words the rally is running out of steam.
Does this mean we will correct tomorrow? Not necessarily, what it does mean is that we are seeing a divergence between the participating equities and the laggards.
As you can see, these divergences cannot continue in perpetuity, either more stocks need to join the party, or the last hold outs will begin to correct.
Advance Decline Line versus S&P 500 and VIXThe charts shows that AdvanceDecline Line and VIX are showing the tops and bottoms of S&P price movement. You'll also notice, that ADL is changing direction a few days before the S&P 500 follows. VIX shows how "deep" the correction will be and when it ends.
