Broad Market Internals, November 3, 2014  
Oct produced the best volume since May ’12, with the surge concentrated on the sell-off in the first half of the month but activity again ticking up last week. Best readings were in Resources broadly (again), as well as large parts of Industrials and Healthcare.

Breadth improved modestly to only lagging having grown increasingly weak through the end of Q1. 52wk highs ended the month at an 8m record, around 2/3rds of the +2.5yr record from last May, with the best concentrations in Consumer Noncyclicals (again), Utilities, and downstream areas in Healthcare, with the lows largely evaporated ex PMs having set a 3yr record midmonth.

Short term indicators - measuring the percentage of stocks above their 10-day moving average - hit the most extreme overbought levels since mid Feb last week, while the recently more important 25-day indicator produced the most overbought readings since Jun.

At the same time the intermediate 50-day indicator has rallied back to heavily overbought after hitting the most extreme oversold levels since fall ‘12 in the 2nd week of Oct.

Finally the LT 200-day indicator is back into mildly overbought territory but at the worst levels during the month readings fell well short of the lows seen on the fall ‘11 decline. The broad market is at or very near extreme ST overbought levels, and a reaction to the powerful - if somewhat technically narrow - gains off the Oct lows is likely imminent, the internal performance of which should provide clues to the IT direction for the market.


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