The market is getting pounded. Have we seen the top? I don't know, but it sure looks like we have.
I have been encouraging clients and subscribers to my monthly newsletter to start preparing for the coming bear market for several months. Is this it? I don't know, but it sure feels like something is happening.
I'll begin with a chart of the percentage of stocks that are trading above their 200 day moving averages. This chart does not look very good. Remember the mini-crash in late January- early February this year? It was pretty scary, but it only got to 43.44% of stocks trading below their 200 day moving averages.
Today it's worse than that. Only 39% of stocks are trading above their 200 day moving averages. Is this the death knell? I don't know, but it doesn't look too good.
Next up is the Advance-Decline chart. Back in March of this year this indicator hit minus 2405. Today it's at minus 2353. Draw your own conclusions.
Lastly we have the count of new highs minus new lows. There is a glimmer of hope in this chart, because the number bounced today, from minus 375 to minus 176. Again, draw your own conclusion.
Final Thoughts
This has been a quick recap of the market internals, and it's not a comprehensive analysis of what's happening in the market. What I've shown here is pretty disturbing, but don't forget that this historic bull market has recovered from this kind of drubbing many times before. It may do so again.
But I urge you to at least think about protecting your flank in case this decline doesn't stop.