Market Internals Update

Since May 2010, the market has gone higher with fewer and fewer S&P stocks hitting new 52 week highs. Since November 2010, the new highs has decelerated.



Since November 2010 the S&P has gone sharply higher with a steady erosion of stocks above their 50 day moving average.



Here is a rough wave count that I'm keeping. It has us in wave 5 currently which is an ending wave.



This chart zooms into the 5th wave, and has us in the 5th wave of the 5th wave, very close to the end. A reversal from here would likely be quite violent.



Please realize that these wave counts may be incorrect and are subject to being instantly disproved by the market at any time. But they serve as a rough guideline and are part of a framework of attempting to set up trades with the highest risk/reward ratios.