There is no real change in the indicator summary. The market remains split with some bearish indicators and some bullish indications. This is normal after a severe correction that tests the viability of the long-term bull market (March 2009 to present). Chart-wise, the February lows are holding and this keeps the uptrend viable. The three neutral indicators can go either way and I will be watching these closely. A lot may depend on techs and the Nasdaq. Right now, techs are holding up well with signs of relative strength. A breakdown in the technology sector would push the AD Volume Line indicator bearish, the Bullish Percent Indices bearish and the dominant sector indicator bearish. All eyes on technology.
- 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 remains 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. Still hanging on...
- SPY Momentum: Bearish. The Aroon Oscillator and MACD (5,35,5) remain in negative territory. RSI broke below 50.
- Offensive Sector Performance: Neutral. The consumer discretionary and technology sectors held up quite well over the last three weeks, but industrials and finance are lagging. It is a split decision.
- Nasdaq Performance: Bullish. The Nasdaq continues to hold up better than the NY Composite as the $COMPQ:$NYA ratio trends higher.
- Small-caps Performance: Bullish. Small-caps are outperforming large-caps as the IWM:OEF ratio trends higher.
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.
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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