Art Cashin – This Is Why The Stock Market Is Gyrating…Again
Art Cashin – This Is Why The Stock Market Is Gyrating…Again from King World News
On the heels of recent volatility in global markets, this is why the stock market is gyrating, again.
May 15 (King World News) – Here is a portion of today’s note from legend Art Cashin: Another Pair Of Eyes – My friend, and one the Floor’s favorite chartists, Mark Newton, opined on the recent action in his advisory letter overnight.
Here’s a bit of what Mark wrote:
BOTTOM LINE: No change to this- Trends are bearish and momentum still hasn’t gotten sufficiently oversold to suggest lows are in place. While volume was very heavy on the downside, which often can occur close to lows after an extended decline, it looks right to stay defensive until prices can get either down to 2785, or manage to rise back up over 2862 on a close, which is the first real level of upside importance. As written about last week, downside should be limited to 2775 with a few targets at 2785-7.
Overall, Yesterday’s rally seemed constructive based on price points gained alone. However, by the close, SPX had failed to take out the prior day’s highs, and both volume and breadth were below that seen on the prior day. Given that Tuesday was moderately positive while Monday was a negative, this simply means that Monday’s decline occurred on 6/1 negative breadth, while on Tuesday, we saw just under +3/1 positive. Overall not a bad reading, but compared to Monday when over 90% of the volume flowed into Down vs Up stocks, it would have been better to show equal strength on yesterday’s rally in both volume and also in positive breadth. Additionally, there wasn’t any real breakout of the downtrend which has been in place since early May. This initially hits near 2850, but as was written above, I am looking for a move over 2862 on a close to have confidence of a low at hand. For now, there stands a chance that lows can certainly be retested, as nothing with regards to yesterday’s bounce changed the structure.