Courtesy of Declan. I have added a new market sentiment chart with relative momentum, trend and volume metrics in the one chart. As an example in the new chart, industrials (XLI) gained Thursday and Friday, but these gains were delivered with a drop in momentum, cooling volume and a weak bullish trend.

The Relative Momentum, Trend and Volume Chart:

In terms of the relative relationship between price change and bullishness, Industrials experienced a sharp drop in bullishness which failed to recover during the Dec 4th – 10th bounce. It looks like further downside is on the cards – at least until Bullishness drops below the 10% level, which is usually a good near term buying proposition.
Price vs Bullishness (#sectorbreadth):

Net sum: Industrials look to offer better a better short-side play over the coming days.

- Phil

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Philip R. Davis is a founder of Phil's Stock World (www.philstockworld.com), a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders. Mr. Davis is a serial entrepreneur, having founded software company Accu-Title, a real estate title insurance software solution, and is also the President of the Delphi Consulting Corp., an M&A consulting firm that helps large and small companies obtain funding and close deals. He was also the founder of Accu-Search, a property data corporation that was sold to DataTrace in 2004 and Personality Plus, a precursor to eHarmony.com. Phil was a former editor of a UMass/Amherst humor magazine and it shows in his writing -- which is filled with colorful commentary along with very specific ideas on stock option purchases (Phil rarely holds actual stocks). Visit: Phil's Stock World (www.philstockworld.com)

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