After a positive run from September 3rd, the indicator summary turned negative this week with six indicator downgrades. At this point, I still view the recent decline as a correction within a bigger uptrend. However, we do not know how this correction will unfold or how long it will last. It could be short, like January-February 2010, or relatively long, like April-June 2010. My guess? This corrective process will be different from the last two corrections. Perhaps flatter in nature and more like a trading range. This means we could see the indicator summary whipsaw from positive to negative in the coming weeks. There is a chart at the end of this commentary that marks the positive-negative shifts in this indicator summary. See the About Page for more on Art's Charts and this indicator summary.
- AD Lines: Neutral. The Nasdaq AD Line broke support from the January lows, but the NYSE AD Line remains well above these lows and in an uptrend.
- AD Volume Lines: Bearish. The NYSE and Nasdaq AD Volume Lines broke below their January lows.
- Net New Highs: Neutral. Nasdaq Net New Highs dipped to their lowest level since early May and the Nasdaq Cumulative Net New Highs Line moved below its 10-day EMA for the first time since early September. NYSE Net New Highs dipped into negative territory for the third time since late August, but the NYSE Cumulative Net New Highs Line remains above its 10-day EMA.
- Bullish Percent Indices: Bullish. All BPIs remain above 50%. The technology BPI is the weakest at 57%.
- VIX/VXN: Bearish. The S&P 500 Volatility Index ($VIX) and the Nasdaq 100 Volatility Index ($VXN) both surged and broke above 25.
- Trend Structure: Bullish. DIA, QQQQ, IWM, SPY and MDY have yet to trace out a major reversal pattern (double top, head-and-shoulders). All recorded new 52-week highs in mid February and are entitled to a correction.
- SPY Momentum: Bearish. MACD(5,35,5) moved into negative territory for the first time in six months. Aroon broke below -50 for the first time since May. RSI broke below its November lows.
- Offensive Sector Performance: Bearish. The finance, industrials and technology sectors have been relatively weak since mid February.
- Nasdaq Performance: Bearish. The Nasdaq has been underperforming the NY Composite ($NYA) since early January.
- Small-cap Performance: Neutral. The Russell 2000/S&P 100 ratio may be forming a lower high (below the December high). A move below the late February low would show small-caps leading the way lower.
- Breadth Charts (here) and Inter-market charts (here) have been updated
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-09
Negative on 5-Feb-10
Positive on 5-March-10
Negative on 11-Jun-10
Positive on 18-Jun-10
Negative on 24-Jun-10
Positive on 6-Aug-10
Negative on 13-Aug-10
Positive on 3-Sep-10
Negative on 18-Mar-11
