Market Internals Deteriorating
11/23/2010 10:01 am EST
The conflict in Korea helped to push stocks lower ahead of the opening, which increases the chances of a deeper correction. From a longer-term perspective, it is a concern that the number of stocks making new highs has not exceeded the April peak of 584 as the recent high was just 214. This divergence needs to be resolved soon. The NYSE A/D line did confirm the recent highs in the major averages, so the intermediate trend is still positive. There is some evidence of short-term deterioration as the A/D line tested support last week, and a break of the recent lows would suggest a drop in the S&P to 1140-1160.
Tom Aspray, professional trader and analyst, serves as video content editor for MoneyShow.com. The views expressed here are his own.