Market internals suggest investors shouldn’t view Friday’s bloodbath in the broad market indexes as the washout needed to clear the way for a stock market recovery. The NYSE’s Arms Index, which is a volume-weighted measure of market breadth many use measure selling or buying intensity, rose to 1..44 in afternoon trade. That was well below the key 2.0 level, which technicians view as the threshold that suggests panic selling, or capitulation by bulls. Meanwhile, the Dow Jones Industrial Average tumbled 375 points, and the S&P 500 slumped 2.3%. Last year’s high in the NYSE’s Arms Index was 4.95 on Sept. 1, when the Dow tumbled 470 points; the Dow rose 293 points the next day, and climbed 1830 points over the next three months.
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