Market Internals Remain Extremely Weak

Earlier this year we highlighted my advance-decline data on the last rally heading into the ultimate stock market top in late April/early May. We noted that it was not confirming the price march to new highs. Yet, the exchange advance-decline data was making all time highs. Something many are now pointing to as a reason to remain bullish. The reality is the true advance-decline data wasn't anywhere close to making a new high. (The advance-decline data providing by the exchanges has become substantially aberrant as Frankenstein finance distorts market behavior.)

Again, let's look at the same data since this market started selling off. It is not confirming the recent enthusiasm that we are going to hold this pricing level. In fact, as of today we are close to making a new low while the market has attempted to rally higher over the past few weeks.

Additionally, many people are still using 90% upside or downside advance-decline days to point to the start of a new bull market or the end of a bear market. As we said ages ago, this data point has become completely irrelevant in today's market. We have had dozens of these days since the start of the 2008 collapse. In a market defined by so much leverage, program trading, free Federal Reserve money for speculators and derivatives, relying on this data is a recipe for disaster for long term investors and substantial trading losses for unsophisticated traders.

Unless something changes, we are simply watching the rhythms of the market play out before another dive rather than some protracted new rally. So much for the hyperinflationistas expecting some parabolic stock market blow off. We've been listening to this pablum for at least three years now. Now they have some Youtube video scaring uninformed Americans senseless. (The favorite tactic or terror used by hoods, goons and elitists in a fear-based society.) We wrote on here a list of necessary but not sufficient dynamics to create hyperinflation.