GaveKal Capital: Weak Stock Market Closes Surge to Highest Level …

While the intraday performance trend of the stock market isn’t everything, it often gives clues to possible directional changes in the overall trend of the market. One of the ways we measure the intraday trend of the market is to count the number of weak closes over a period of time. We define weak closes as days in which the closing price is within 25% of the intraday low.

As our Weak Close Indicator shows below, the number of weak market closes for the S&P 500 (red line, left axis, inverted) has shot up over the last three weeks or so and is now at a level not seen since the end of 2012. We note that a similar event happened in 2013-2014 and the market kept on advancing, but the move in the indicator over the last few weeks has been noteworthy.

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GaveKal Capital: Weak Stock Market Closes Surge to Highest Level …