Coe pointed to the relative underperformance of the Nasdaq-100 versus the S&P 500.
“Day by day, bearish technical evidence is mounting and as a result what initially appeared to be just a reversionary pull-back may now be morphing into something more severe,” the analyst wrote Monday.
The ratio of the Nasdaq-100-tracking PowerShares QQQ (NasdaqGM: QQQ) against the SPDR S&P 500 ETF (NYSEArca: SPY) has “broken and sustained a move beneath its 200-day exponential moving average,” Coe added. “With the exception of a brief duck lower in March, the ratio had been above this average since the start of 2009 when it provided upside leadership out of the bear market lows. However, the reverse may now be underway and that is a concern.”
