The indicator summary has been positive for almost a full month. While there are no signs of medium-term weakness, there are some signs of short-term fatigue setting into the market. First, the Russell 2000 ETF is still battling resistance from its summer highs. Second, the Finance SPDR failed at resistance from its summer highs. Third, there is relative weakness in the Nasdaq AD Line. While I am concerned with these three areas, the bulk of the evidence remains bullish for now.
- AD Lines: Neutral. The NYSE AD Line hit a new 52-week high again this week (bullish), but the Nasdaq AD Line remains below its August high (bearish).
- AD Volume Lines: Bullish. The NYSE and Nasdaq AD Volume Lines moved above their summer highs to forge higher highs (bullish).
- Net New Highs: Bullish. Nasdaq and NYSE Net New Highs remain firmly positive and the Cumulative Net New Highs lines are moving higher (bullish).
- Bullish Percent Indices: Bullish. Except for the Nasdaq BPI (49.76%), the BPIs for the other major indices are above 50%. Eight of the nine sector BPIs are above 50%. Finance (45.52%) remains the hold out.
- VIX/VXN: Bullish. The S&P 500 Volatility Index ($VIX) and Nasdaq 100 Volatility Index ($VXN) remain in downtrends. Falling volatility means lower risk, which is bullish for stocks.
- Trend Structure: Bullish. QQQQ, SPY and DIA formed higher lows in late August and higher highs in September. IWM edged above its summer highs this week (bullish).
- SPY Momentum: Bullish. MACD(5,35,5) and Aroon (20) moved into positive territory the second week of September and RSI surged above 60.
- Offensive Sector Performance: Bullish. Finance turned into the big laggard, but tech, consumer discretionary and industrials are leading. 3 out of 4 are in bull mode.
- Nasdaq Performance: Bullish. The $COMPQ:$NYA ratio broke above its late August highs and techs are clearly leading the charge.
- Small-cap Performance: Bullish. A small bullish divergence formed in the $RUT:$OEX ratio in mid August and this price relative has been moving higher ever since.
- 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.
