Psychology Moves Back to P4

The correction that bottomed out three weeks ago, as our oscillators reached the extreme oversold levels that almost always produce a "recoil" rally, also produced the most stocks making 52-week lows of any time since the sever correction bottom of 2011.  Even though the S&P 500 was very much higer than it had been at the low on June 4th of this year, we had more stocks making lower lows - not a good healthy sign.  This shows the dysfunction of this bull market, and it highlights the lack of overall breadth of the recent phases of this bull market. 
It is not earth-shaking, but this morning we also see that our Psychology Composite that was starting to approach the bullish zone of P2 three weeks ago when the market was still weak, has now moved back to the 50% level - right in the middle of its range - and has actually tip-toed across that threshold level to a P4 again.
Therefore, it is our opinion that the stock market has a little more work (correction) to do before this bull market gets cranked back up again.
Don Hays
If you are a subscriber to, click here to read our recent reports.  If you would like to learn more about the research and commentary offered by Hays Advisory, click here.
Please see important disclosures at the bottom of this page.