The S&P 500 was recently down 1.8% at 1167, on pace for a sixth straight day of declines. It has dropped 7.2% during the streak.
John Kosar, director of research at Asbury Research, pointed to another indicator of market breadth that also suggests additional declines could be in the offing. The 26-week new highs/new lows ratio for the NYSE Composite sits at about 20%, according to Kosar. Most of the bottoms in the S&P 500 over the last two years have occurred when the ratio declined below 12%.
“From a market-breadth standpoint, the market is not yet washed out enough for a bottom to emerge,” Kosar said. This “clears the way for more near-term weakness.”