Art's Charts

Indicator Summary turns positive

Arthur Hill

Arthur Hill

Chief Technical Strategist, TrendInvestorPro.com

Big swings continue to whipsaw the indicator summary. The S&P 500 first closed below 1100 on May 20th. Since then the index has crossed the 1100 level at least nine times as the index trades within a large consolidation. There have been four swings of at least 8% since mid May (14 weeks). That is one 8% swing every 3.5 weeks. Needless to say, such swings are strong enough to move the indicators. With reversals every 3-4 weeks, the lagging indicator summary is getting whipsawed back and forth. Once again, the summary has moved from negative to positive. There are still many splits within the indicators though. For example, the NYSE AD Volume Line is considered bullish, but the Nasdaq AD Volume Line is considered neutral. Together, I classified them as bullish overall. This means the indicator summary is still prone to another flip should stocks swing sharply lower. Indicator details can be found after the jump.

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  • AD Lines: Neutral. The NYSE AD Line broke above channel resistance and remains strong overall (bullish). The Nasdaq AD Line has yet to reverse its downtrend (bearish). 
  • AD Volume Lines: Bullish. The NYSE AD Volume Line formed a higher high in early August and a higher low in late August (bullish). The Nasdaq AD Volume Line formed a lower high in early August and a higher low in late August (neutral).
  • Net New Highs: Bullish. Nasdaq Net New Highs turned positive this week, but the cumulative Net New Highs line has been trending lower since mid May (neutral). NYSE Net New Highs remain positive overall and the cumulative Net New Highs line continues to rise (bullish).
  • Bullish Percent Indices: Bearish. The major index BPIs are all below 50%. Five of the nine sector BPIs are below 50%. Energy, consumer staples, materials and utilities are at or above 50%. 
  • VIX/VXN: Neutral. The S&P 500 Volatility Index ($VIX) and Nasdaq 100 Volatility Index ($VXN) moved sharply lower the last eight days and remain largely flat since mid July.  
  • Trend Structure: Bullish. QQQQ, SPY and DIA formed higher lows and broke above channel resistance with big moves this week. IWM tested its July low and broke above channel resistance.
  • SPY Momentum: Bearish. MACD(5,35,5) and Aroon (20) remain in negative territory, but RSI surged above 50.
  • Offensive Sector Performance: Neutral. Consumer discretionary and industrials are showing some relative strength, but technology and finance show relative weakness overall. 
  • Nasdaq Performance: Bearish. The $COMPQ:$NYA ratio moved to a new reaction low in early September.  
  • Small-cap Performance: Bullish. The $RUT:$OEX ratio has been trending lower since April, but a small bullish divergence formed in August and the price relative surged the last two weeks.
  • 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. Previous turns include: Positive on 11-Sept. Negative on 5-February. Positive on 5-March. Negative on 11-June. Positive on 18-June. Negative on 24-June. Positive on August 6. Negative on August 13. Positive on September 3.
Arthur Hill
About the author: , 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. Learn More