Small-caps broke down this week and the Bullish Percent Index indicator turned bearish. These two were enough to turn the indicator summary negative for the first time since March 5th. Techs were also hit hard this week, but the $COMPQ:$NYA ratio remains in an uptrend. In addition, the consumer discretionary remains relatively strong and this is positive. With Thursday's market surge, the major index ETFs held at or above their February lows. Technically, the long-term trend remains up as long as these lows hold. Follow through to Thursday's surge is needed to turn the indicator summary positive again.
- AD Lines: Bullish. The Nasdaq and NYSE AD Lines recorded new 52-week highs in April and remain above their February lows. The NYSE AD Line is holding up especially well.
- AD Volume Lines: Neutral. The Nasdaq AD Volume Line is now testing its February low and 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: Bearish. The Bullish Percent Indices for the major indices are below 50%. Seven of the nine sector BPIs are below 50%. Only the consumer staples and utilities BPIs are above 50%.
- Sentiment: Bearish. The S&P 500 Volatility Index ($VIX) and Nasdaq 100 Volatility Index ($VXN) clearly broke resistance and remain above these resistance breakouts.
- 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. Despite this week's set back, technology continues to hold up well over the last few months. Strength in the consumer discretionary also remains a plus, but relative weakness in finance and industrials is a negative.
- Nasdaq Performance: Bullish. The $COMPQ:$NYA ratio turned lower in June, but remains above its May low.
- Small-caps Performance: Bearish. The $RUT:$OEX ratio broke down this week with a move below the May low.
- Breadth charts have been updated.
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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