The market suffered a tough down day to start the week. While this may feel like an isolated one-off incident, the momentum indicators were kicking up plenty of divergences on the weekly chart. Shown below is a daily chart including Monday's close. The MACD is rolling over near the zero level so this is particularly concerning.
On a weekly chart, the market does not look as bad for the $SPX yet. The Full Stochastic indicator is hesitating here. It needs to regain momentum as a rollover here would be eerily similar to the signal we got shortly after the market top in 2015. I will say that the break in the uptrend on the PPO should definitely warrant more caution. A moderating trend in the PPO does not create a 'sell' signal by itself. However, when other markets get weak, that can be a bigger problem.
Moving onto the commodities, the commodities market couldn't be more indifferent. 19 of 24 commodities are below the 10-week moving average which is not that bullish. But they aren't plummeting either.
Oil, arguably one of the more important commodities is close to the middle of its range for the last three months.
However, the oil stocks are only 10% above 52 week lows. The SCTR ranking shows this ETF in the bottom 25% of the ETF's for price movement. While the price of oil has hovered above $60, these stocks continue to whimper. Today shows a close on the 200 daily moving average on this chart that has 6 months rather than three months like the oil chart above. Just very difficult to be a buyer of energy stocks if they can't be moving up better than this after a steep selloff.
The StockCharts for Dummies book is now available wherever books are sold!
I will be speaking to the CMT Association in Minneapolis March 20th, 2018 by webinar with some very exciting charts (heck- they even keep me up after midnight!). If you would like to join in person at 4 PM CDT, please register for the CMT Association meeting. CMT Association Network Events.
In the commodities video for the week, you'll see the commodities as a group really struggling which is odd in the later cycle period. The video below spends a quick moving 45 minutes describing the current situation for commodities.
Greg Schnell, CMT, MFTA.