Bears Have the Momentum - Posted by Coolhand

The bears broke through support today and price closed well under the 50 dma on both charts.

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We can also see that price closed off the lows of the day. That may not mean much in the context of a bearish NAAIM reading. Momentum accelerated to the downside. Volume was up. I was asked if a switch has been flipped. I was not ready to embrace that notion the way I did over a year ago, but yields are now rising and so is inflation. Those can be switches all by themselves.

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Cumulative breadth fell again and is in a slow downtrend. It hasn't gotten serious, but if the sellers jam the exits it could fall much quicker.

NAAIM came in bearish today; at least in the short term (a week). They are shorting more than they were so I don't think the downside is over.

I am now bearish along with the smart money. The bulls may mount another run to the upside, but momentum now favors the bears. I suspect the bottom is not in and could be several percentage points further down.