In my last post in mid-October I mentioned the Bulls are likely to take charge, soon after the Market retested all-time highs. However, the current Market environment now is much different. I am noticing an ominous chart (shown above) for the Bulls.
The chart above is the Ratio Adjusted Summation Index ($NYSI). The $NYSI, which is a great tool to measure the strength of a Bull Market, is calculated by adding the daily values of the McClellan Oscillator. Readings above 500 convey the message that we are in a Bull Market and will continue to make higher highs. Make note of the black highlighted area where the $NYSI barely goes above 500, before continually making lower lows even though the market maintained and made a slightly higher high (divergence). Eventually it caught up to the market, and a +20% correction occurred.