The Indicator Summary remains positive, just barely. I changed the name to better reflect the actual contents of the table. Two lagging indicators turned this week. Net New Highs turned bearish as the 10-day SMA moved into negative territory. The Bullish Percent Indices turned neutral because some moved below the 50% level. Two key indications remain bullish: trend/structure and the AD Lines. The major index ETFs held their February lows to keep the uptrend in place. The AD Line held above their February lows to show some relative strength. In addition, the Nasdaq held up better than the NYSE and small-caps held up better than large-caps. With the indicator summary at +1, a moment-of-truth of truth is here. Further weakness would likely tilt the evidence bearish.
- AD Lines: Bullish. The Nasdaq and NYSE AD Lines recorded new 52-week highs in April and remain well above their February lows.
- AD Volume Lines: Neutral. The Nasdaq AD Volume Line remains well above its February low, but the NYSE AD Volume Line broke below this key low.
- Net New Highs: Bearish. The 10-day SMA for Net New Highs moved into negative territory for the first time since May (NYSE) and July (Nasdaq). The recent negative readings were the lowest since March 2009. This indicator needs to turn positive to revive the bulls.
- Bullish Percent Indices: Neutral. The Nasdaq Bullish Percent Indices remain above 50%, but the S&P 500 and NYSE BPIs broke below 50%. BPIs for technology, finance and consumer discretionary remain above 50%, but the BPI for industrials is below 50%. It is a mixed bag here.
- Sentiment: Bearish. The S&P 500 Volatility Index ($VIX) and Nasdaq 100 Volatility Index ($VXN) clearly broke resistance to start long-term uptrends in volatility.
- Trend Structure: Bullish. The major index ETFs all recorded new 52-week highs in April and have yet to break their February lows.
- SPY Momentum: Bearish. The Aroon Oscillator and MACD (5,35,5) remain in negative territory. RSI broke below 50.
- Offensive Sector Performance: Bearish. The consumer discretionary and technology sectors held up quite well over the last three weeks. In fact, the price relatives for both surged over the last three weeks (XLY:SPY and XLK:SPY).
- Nasdaq Performance: Bullish. The Nasdaq continues to hold up better than the NY Composite as the $COMPQ:$NYA ratio trends higher.
- Small-cap Performance: Bullish. Small-caps are outperforming large-caps as the IWM:OEF ratio trends higher.
- Breadth charts have been updated (click here)
About the author:
Arthur Hill, CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London.
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