Stocks Turn Bearish, Violating Support Levels As Valuations Remain Extended

Major equity indexes violated support and turning bearish in Thursday's trading action. Near-term trends remain a mix of neutral and bearish.

Market breadth was weak but left the cumulative advance/decline lines neutral. Data is mostly neutral but the detrended Rydex Ratio turned bearish.

Stochastic levels are overbought but lack bearish crossover signals. S&P 500 forward valuation remains very extended with room for contraction.

Some index charts turned bearish, breaking support and closing below downtrend lines. Poor breadth left cumulative advance/decline lines neutral.

Forward S&P 500 EPS estimates dropped further, keeping forward P/E multiple well above fair value rule of 20. Valuation remains concerning.