Medium-Term Evidence Remains Bullish

There is no change in the Stock Market Summary this week. All indicators are in bull mode, but there were some signs of less strength this week. The NYSE AD Volume Line did not exceed last week's high. Nasdaq Net Advances dipped to their lowest (negative) level since early February. VIX and VXN are trading near levels that coincided with the Oct-07 and May-08 peaks in the S&P 500. We also know that the major indices are short-term overbought after an extraordinary seven week run. While the overall evidence remains bullish, the odds of a pullback or corrective period are increasing.

• AD Lines: Bullish. The Nasdaq AD Line edged above its Sep-Oct highs for a 52-week high this week. The NYSE AD Line hit a new 52-week high this week and remains in a clear uptrend.
• AD Volume Lines: Bullish. The Nasdaq AD Volume Line hit a new 52-week high again this week, but the NYSE AD Volume Line fell short of last week's high.
• Net New Highs: Bullish. Nasdaq Net New Highs have been above +100 the entire month. NYSE Net New Highs have been above +200 almost the entire month.
• Bullish Percent Indices: Bullish. All major index and sector BPI's are above 50%.
• Fear Index: Bullish. The S&P 500 Volatility Index ($VIX) and Nasdaq 100 Volatility Index ($VXN) hit new lows last week, but are trading near their Oct-07 and May-08 lows (seen of the last two major peaks in SPX).
• Trend Structure: Bullish. The Russell 2000 ETF, Nasdaq 100 ETF, S&P 400 MidCap ETF, S&P 500 ETF and Dow SPDR (DIA) hit new 52-week highs this week. 
• SPY Momentum: Bullish. But overbought. The Aroon Oscillator is above +50. MACD (5,35,5) is near its October levels and moved below its signal line this week. RSI was above 70 for two weeks and moved back below on Thursday.  
• Offensive Sector Performance: Bullish. The Consumer Discretionary SPDR (XLY), Financials SPDR (XLF) and Industrials SPDR (XLI) broke above their January highs. The Technology SPDR (XLK) is trading at its January high, but QQQQ and the Nasdaq broke their January highs. 
• Nasdaq Performance: Bullish. The Nasdaq has been leading the NY Composite since early February. 
• Small-caps Performance: Bullish. Small-caps and mid-caps outperformed large-caps since early February. 
• Breadth Charts have been updated (click here)

This table is designed to offer an objective look at current market conditions. It does not aim to pick tops or bottoms. Instead, it seeks to identify noticeable shifts in buying and selling pressure. With 10 indicator groups, the medium-term evidence is unlikely to change drastically overnight. The evidence was bullish from early September until late January. The Jan-Feb decline was enough to turn the evidence bearish on February 5th, but this decline turned out to be a correction and the evidence turned bullish again on March 5th. It is not immune to whipsaws.