Weekly Market Commentary 3.14.14

This stock market has been able to ward off even a modest correction since the fall of 2012.  However, we are now seeing a chart breakdown accompanied by sell signals from some of our most trusted indicators.  If the bears can’t make some hay with this environment, I would be surprised.

LM 3 13 spx

Equity-only put-call ratios have rolled over to sell signals.

Market breadth had been extremely overbought through last
Thursday (March 6th).  But steadily eroding breadth this week has caused
both breadth indicators to generate sell signals.

Volatility indices ($VIX, $VXO, and $VXST) were reluctant to
join in with the bearishness until they broke out Thursday.
This appears to be the confirmation of a rising trend
in volatility, and that is bearish for stocks.

LM 3 13 vix

We are bearish now, but will be observant.