Review

Last week's call for a turn down is only looking half right at the moment. The SP500 has not closed any higher but the asx did move higher after showing a couple of days of relative strength.

So where to now?

I came across a post on Twitter referencing a call by Bo Polny. In short he's calling for a crash and for last week's high on the 22nd to be 'THE' high. I confess that I find it too easy to like someone when they agree with me but his record (self published) does look impressive. In any case we'll see soon enough how close to the mark he might be.


NYSE Breadth

After a brief 'oversold spike' higher the market has thus far failed to follow through higher and the NYMO has oscillated around zero with some overall relative weakness. As a result the NYSI has not made any meaningful changes and continues to show a solid overall downtrend and will likely fail to show +ve divergence if the market dives back down to the recent lows.

On the positive side the NYAD ema20 is holding above zero for the most part so advancing stocks are still outweighing declining stocks.

The cumulative NYAD is still longer term bullish and at worst short term neutral.

The Nasdaq and Russell 2000 indicies have continued their neutral indications.

ASX Breadth

The ASX McLellan Oscillator is showing the slightest of -ve divergences however the Summation Index has not broken down from it's shallow uptrend. In this regard little has changed since last weekend however the index has now printed 12 trading days up from the mid September low so the odds of a high in place have just increased a little.


Sentiment

Sentiment is little changed from a week ago and remains overall contrarian bearish.

NAAIM sentiment has increased to a bit over 84 and Rydex asset allocations have also moved higher into contrarian bearish readings.

Until such time as there has been a significant price drop with it's attendant sentiment reversal I will continue to see the current setup as overall bearish for the market.


Summary

Little has changed from one week ago... The overall breadth setup continues to be bearish (although lacking the cumulative NYAD) and sentiment has moved to a slightly higher bullish reading.

My conclusion therefore remains the same... I continue to expect a major move down and the current absence of any potential for +ve divergence makes me inclined to think that the downtrend could last for quite some time.