Will this turn out to be a Warning Sign?
Every night, our computers crank away and calculate how many stocks were in our rating as being “Very Weak”.
If you think about it, if the number of Very Weak stocks increases significantly, then that says an increasing number of stocks are breaking down and/or that investors are selling more of their stock holdings.
Today’s chart display’s that phenomenon. Take a quick look at how the SPY correlates with the rise and fall of the number of Very Weak stocks we monitor.
The reason we are showing you this chart today, is for you to observe that the number of Very Weak Stocks has risen and it is now above a resistance line.
We are at a pivot point now … If the number of Very Weak stocks rises above last Friday’s level and makes a higher/high, you will see the market pullback. However, if it falls below the green support line, the market will have another short term up move to enjoy.