Kevin Lane of Fusion Analytics is a good friend of mine — and an excellent technician. He has been out of the loop for some time now setting up the new office.
He is now back in the saddle and easing back into putting out regular technical commentary. Kevin covers a lot of my favorite technical indicators. Yesterday, he put out a few charts well worth reproducing here:
As seen below the cumulative advance-decline line on the NASADAQ was in decline long for a long time.
NASDAQ Cumulative Advancers-Decliners:
The NASDAQ Cumulative Up-Down Volume line gave way to more distribution as seen by the breaking of the uptrend line (green line and red circle) as more and more issues declined.
NASDAQ Cumulative Up-Down Volume:
Given the more consistency of 52 week lows (red circle) of late this suggests there is good distribution in the tape. Another shot down towards the -300 level (orange line) would probably help set a short-term oversold condition. However give the more frequent dips below the zero line in the last few years and the continued weakening a/d line we would suggest rallies are better to be sold than dips bought until internals improve measurably.
NASDAQ 52 week high lows: