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Market timer McClellan turns bearish, as S&P 500’s gain belied negative breadth data

Tom McClellan, publisher of the McClellan Market Report, has turned bearish on stocks for short- and intermediate-term trading styles after Tuesday’s close, as the S&P 500’s
SPX,
+0.23%

rise to its first post-COVID-19 record close, and yet another record for the Nasdaq Composite
COMP,
+0.72%
,
belied the weakness seen in the broader stock market. McClellan said there were 708 net declining stocks on the NYSE, and volume of declining stocks was twice that of advancing volume. He believes there will be “a minor dip lasting about a week and a half” in stocks. Then, toward the end of next week, McClellan expects an oversold condition to develop, or sentiment will become overly pessimistic, which should lead to a bounce that takes stocks to a slightly higher high that is due on Sept. 3.

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