Friday, January 16, 2009

CBI Remains Flatlined

I've had a few questions about my Capitulative Breadth Indicator (CBI). (For more information see "CBI" label on the right hand side of the page.) When the market sells off hard it typically will begin to rise. So far in this selloff it hasn't budged. Still zero.

I track CBI percentages for 24 sectors each night in the Subscriber Letter. As of Thursday's close here was the breakdown: (click on table to enlarge)

So while there has been some sharp selling over the last week or so it isn't the type that my indicator would consider capitulative. This doesn't mean the market won't bounce. It just means we don't have evidence from the CBI that it will.

To put the above numbers into perspective, below is a snapshot from the November 20th close: (click on table to enlarge)


Douglas said...

thanks. I look at very different medium term indicators but have read some of what you have written about your CBI.

In December the analysis I was looking at changed my view and I stopped believing that we are going to get a huge bear market rally. Just before this current sell-off started I went short.

There have been a couple of very short term bounces indicated (including at the same time as your turnaround Tuesday). They have proved to be very weak though I don't know whether this current little bounce will go a bit further.

Anyway - the bearish indicators on the medium term side have actually got strong.

I think that very soon the stock indicies will be at levels that predict another great depression.

Am not at all surprised that your CBI has not flickered.

Douglas said...


Do you check for the Hindenburg Omen? Am I correct that it was last observed in the summer last year?