New market highs again, lowest $VIX readings for a September in history. Bears are staying in the zoo.

Got to love OPEX week rallies. They are standard fare to the program structure of markets (I’ve talked about them for years) and last week’s oversold readings in financials yielded a clue that a bounce was at least was very possible if not very likely:

I think the technical term is: Duh!

But more interesting to me is what’s happening under the hood here and that’s more akin to a total breakdown in the structure.

Yesterday the $NYA made new all time highs. Sounds good right? Well until you realize that these new highs came with almost 38% of its components below their respective 200 day moving averages:

This represents a massive negative divergence versus previous highs in August. Total breakdown.

What’s it mean? Nothing until something happens. But I will point out that new highs were an exciting thing back in October/November of 2007 on a similar breakdown versus that year’s July new highs:

That high was the end of the bull market back then and the breakdown in components above their 200MA pointed to significant underlying weakness that proved to be extremely meaningful.

Doesn’t mean we can’t go higher from here, but I’m certainly taking note of this rather pronounced breakdown.