There Has Been More Selling Than Buying In The Stock Market For Weeks

There has been more selling than buying in the stock market for weeks and now it is starting to hurt the S&P 500. Now the selling has hurt the Russell 2000 and things such as the ARKK ETF for months and the type of stocks inside of it, but now that damage is spreading. First take a look at this chart, which is the volume advance/decline line.

At the top of this chart you can see the Advance/Decline Volume line chart. It peaked in November. On the bottom you can see the S&P 500.

Notice how the buying volume peaked in November, but the S&P 500 managed to make a new high last week. What that was is a negative divergence in the markets. This indicator is still above its November and September lows, but if it goes below those lows then you should take this as a SECOND flashing red warning sign on the markets.

We already got the FIRST red warning sign when the internals collapsed in November, meaning the number of stocks above their 200-day moving average collapsed.

Let’s see what happens, but it is really hard for the market to go up for more than a day or two when this indicator is in a downtrend like this.

And there are other things I’m watching too – like will bonds go up or down the rest of this year if the market continue to act like this?

What About Gold And Other Commodities?

Hopefully the market can bounce for people today, but the overall picture is darkening for the stock market in 2022.