Market tone
The general state of well-being of a securities market, based mostly on trading activity.

Given that definition, what is the tone of today’s market? Even after the market’s most recent upwards move there is the usual cross-current of fundamental, economic and technical issues facing the market. A handful of notable observations follow.

Paul Kedrosky at Infectious Greed pulls toghether a number of items that together should give one pause.

On the other hand, Chris Oliver at finds noted bear, Marc Faber, a.k.a. Dr. Doom, thinks the US consumer may hold up better than widely expected:

Faber says the outlook for U.S. blue chips contrasts with what he sees as a rough ride in high-risk markets in the months ahead just as many emerging market indexes are nudging all-time highs.

Barry Ritholtz at the Big Picture in contrast is far less optimistic thinking that a soft landing is off the table.

The issue isn’t soft landing or not; It is between whether we have a hard landing or a recession — with all that it means for profits, and equity prices . . .

Absent an unexpectedly large slowdown there may still be some valuation support for the equity market. Ryan Batchelor at does a bottoms-up valuation for the Dow and finds it roughly 9% undervalued.

On the technical front a divergence between the strong performance for the market contrasts with relatively tepid market participation.

Brett Steenbarger at TraderFeed examines the role that new highs and new lows tell us about the state of the market. His analysis shows less than favorable conditions going forward.

What this suggests is that a market with relatively high new highs *and* relatively high new lows is frequently a market in the process of topping. The new highs reflect the strong stocks that are taking the broad averages to new price highs, but the new lows reflect underlying weak sectors that eventually drag down the broader market.

Barry Ritholtz (again!) looks at the factors underlying the market’s most recent up-move and finds that once we focus solely on common stocks the advance-decline line is lagging the market’s upswing.

Chad Brand at the Peridot Capitalist sees a double-top forming for the S&P 500.

In addition we are facing a number of seasonal turning points. Ticker Sense looks at an old market saw, “Sell on Rosh Hashanah and Buy on Yom Kippur,” and finds some evidence in favor of market lore.

Looking out a touch farther the Ticker Sense guys take a look at the performance of the Dow in the fourth quarter of mid-term election years. On average not too shabby.

The stock market is always awash in contradictory elements. The question for investors is how to weight the various elements at point in time. Let’s be careful out there.