There's no panic in the stock market selloff, Arms Index suggests

The Arms Index, a volume-weighted breadth measure, is showing no signs of panic-like activity in the stock market, despite the big selloffs in the major market indexes. In fact, the Arms’ for both NYSE and Nasdaq exchanges are slipping below 1.000, which usually occurs when the market is rising. The number of declining stocks is higher than advances by a ratio of 9.3 to 1 on the NYSE and by a ratio of 7.0 to 1 on the Nasdaq. Volume in declining stocks outnumbered up volume by a slightly less 8.3-to-1 ratio on the Big Board and by 6.4 to 1 on the Nasdaq. The NYSE’s Arms is at 0.898 while the Nasdaq Arms is at 0.903. Market technicians tend to view an Arms reading of 2.000 and above, which would occur when the volume ratio was much higher than the ratio of the number of stocks, as indicating panic-like selling. The last time the NYSE Arms closed above 2.000 was May 1, when the S&P 500 SPX, -0.68% slumped 0.8%, and the last time the Nasdaq Arms closed above 2 was Dec. 7, when the Nasdaq Composite COMP, -0.28% dropped 3.1%. Currently, the Dow Jones Industrial Average DJIA, -1.09% tumbled 697 points, or 2.6%, the S&P 500 slumped 2.6% and the Nasdaq Composite dropped 3.2%.

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