Ratio of OEX PC to Equity PC is an excellent tool to measure the spread between smart money (OEX PC) and dumb money (Equity PC). This ratio skyrocketed at the time:
At the same time , insider buying stopped suddenly.
For years, I have been using Catalyst Insider Buying Fund (INSAX) to observe insider buying activity. Once I started tweeting the ratio of INSAX/SPX in 2015, it became popular among traders and analysts. The ratio never recovered since the summer of 2014. Insiders showed reluctance to buy based on the fact that earnings were going to nosedive in coming months and years. This was the time incubation period for what seems to be a possible bear market began.
From this point, it took nearly 1 year for the market to form a long term top. In Aug 2015, the bull market was officially ended on the charts as the main trend which was holding the bull market was broken. As I showed in my earlier posts, it was not only on NYSE chart but many other US and world indices had the similar breakdown.
As you can see on the chart above, post-brexit rally was nothing but a test of the breakdown level coming from Aug 2015. And the most recent plunge that started last week was the confirmation that the test failed and we will eventually make new lows below NYSE 9000 level.
One way to project the next low is to interpolate the past intermediate term lows. In 2007 and 2008, it worked fine.
NYSE weekly, 2007-2008 top
NYSE weekly now
So, together with the other data and long term chart setups I have, I want to repeat that;
Aside from short term corrective rallies that are necessary to reset the sentiment from time to time, I think we are in an intermediate term downtrend that will last months and extend beyond your wildest imagination.