{"id":65840,"date":"2023-09-10T18:09:39","date_gmt":"2023-09-11T01:09:39","guid":{"rendered":"https:\/\/drduru.com\/onetwentytwo\/?p=65840"},"modified":"2023-09-16T17:43:22","modified_gmt":"2023-09-17T00:43:22","slug":"bearish-divergence-raises-prospects-for-oversold-trading-the-market-breadth","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2023\/09\/10\/bearish-divergence-raises-prospects-for-oversold-trading-the-market-breadth\/","title":{"rendered":"A Bearish Divergence Raises Prospects for Oversold Trading – The Market Breadth"},"content":{"rendered":"\n

Stock Market Commentary<\/strong><\/h2>\n\n\n\n

The stock market got a case of the uglies last week<\/a>. The end of summer trading transitioned right into a swift drawdown for the stock market’s second of the three most dangerous months of the year<\/a>. The fresh breakdowns in the major indices accompanied new lows for market breadth. Suddenly, what I thought was a bottom for market breadth last month<\/a> looks like a speedbump on the way to oversold trading. Interestingly, this new low is happening with major indices still above their lows from last month. This is a type of bearish divergence that has me considering the prospects for oversold trading.<\/p>\n\n\n\n

Last week’s plunge in market breadth also caught the attention of TraderMike at swingtradebot. On the big breakdown day of the week, he noted<\/a>: “Breadth is poor, as measured by the ‘% of Stocks Above Their 50-Day Moving Averages’.  That indicator is also interesting because it’s near its August low while the indices are well above their August lows.  I’m not sure what to make of that but I do know that, IMHO, to have a healthy rally that indicator need to be making higher highs and higher lows.  At best it’s going sideways now & on the verge of making a lower low.” Two trading days later, the small caps are near testing their August lows and market breadth is staring down imminent oversold conditions.<\/p>\n\n\n\n