After staging a huge intra-day turn off the day's low on Tuesday, some thought the market was going to head higher on Wednesday. The move higher was not meant to be.
In what was the highest S&P 500 Trust Series ETF (SPY) volume since the Oct. 16 low, trading in excess of 155 million shares on Wednesday, the stock indices finished near the day's low.
The DJIA lost 268.05 points, or 1.51%, to close at 17,533.15. The S&P lost 1.64%, or 33.68 points, to close at 2,026.14. The Nasdaq was down 82.44 points, or 1.7%, to finish at 4,684.03 and the Russell 2000 lost 26.19 points, or 2.2%, to close at 1,161.86. It now appears that the many negative divergences under the surface of this stock market have finally taken hold.
It seems that a stock market that was continually moving higher through the month of November and early December on less than average volume has been met with much higher downside volume. The volume on Wednesday was over 60% higher versus the year-to-date average in the SPY.
One technical indicator that seems to now be bearish is the New High/New Low Index, which measures how many stocks in various indices have reached 52-week highs and how many have reached 52-week lows. Both the monthly and yearly signals have crossed into bearish territory.