NFTRH Update 4.17.13, BKX-SPX Ratio

How nice to drop the gold stock focus for a while.  In recent NFTRH we have noted the BKX-SPX ratio, which has been AROON trend down by daily chart but is still trend up on a weekly.  That is still the case, but with big banks reporting during the kick off to earnings season it is not a good sign that the BKX-SPX ratio is breaking the lower trend line today.

This ratio has led the bull phase and needs to break down to secure more confidence that said bull is ending.  So far so good.

BKX-SPX ratio, daily

If this leads to a weekly AROON down signal, we will have an increasingly bearish stock market picture, as this would be another leader dropping off as it joins the emerging markets, technology, transports, small caps, etc.  Remember that the monthly BKX-SPX ratio never went to an uptrend.

The best trade of the near term could end up being a bearish stock market view.  Lets see how this develops.