Some signs of weakness are creeping into the market, but the bulk of the evidence remains bullish at this point. The major index ETFs recorded 52-week highs in April, the NYSE AD Line hit a 52-week high this week and the Nasdaq AD Volume Line is challenging its February high. On the potentially negative side, there are far fewer Net New Highs in May than in April. Even though Net New Highs remain positive, this drop-off looks similar to the one that occurred just before the March decline. I am also concerned with relative strength and upside leadership from the defensive sectors. The Consumer Staples SPDR (XLP), Healthcare SPDR (XLV) and Utilities SPDR (XLU) hit 52-week highs this week. The Industrials SPDR (XLI), Technology ETF (XLK) and Consumer Discretionary SPDR (XLY) are holding their own, but are not as strong and did not hit new highs this week. The Finance SPDR (XLF) remains relatively weak. See the About Page for more on Art's Chart and the Indicator Summary.
- AD Lines: Neutral. The Nasdaq AD Line peaked in February, but the NYSE AD Line hit a new high this week. NYSE breadth remains strong as Nasdaq breadth lags.
- AD Volume Lines: Neutral. The Nasdaq AD Volume Line is challenging its February high and the NYSE AD Volume Line edged above its February high in late April.
- Net New Highs: Bullish. The Cumulative Net New Highs Lines remain in uptrends as Net New Highs bounced this week. The bounce, however, was rather weak and looks similar to that seen in early March.
- Bullish Percent Indices: Bullish. All BPIs remain above 50%.
- VIX/VXN: Bullish. The S&P 500 Volatility Index ($VIX) and the Nasdaq 100 Volatility Index ($VXN) remain below 20 as fear remains subdued.
- Trend Structure: Bullish. The major index ETFs (DIA, IWM, MDY, QQQ, SPY) recorded 52-week highs in April and are in uptrends overall.
- SPY Momentum: Bullish. Momentum on the April advance was not as strong as in February, but the indicators have yet to break down. Watch the 40-50 support zone for RSI, the zero line for MACD(5,35,5) and -50 for Aroon (20). Moves below these levels would be momentum bearish.
- Offensive Sector Performance: Bullish. The defensive sectors (staples, healthcare, utilities) are outperforming the offensive sectors (consumer discretionary, finance, technology, industrials). However, XLY remains strong, XLK is consolidating at resistance and XLI hit a 52-week high in April
- Nasdaq Performance: Bullish. Nasdaq relative strength surged in May and the $COMPQ:$NYA ratio is nearing its February high.
- Small-cap Performance: Bullish. Small-caps performance surged over the past seven days and the $RUT:$OEX ratio remains in an uptrend since late August.
- 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
Positive on 25-Mar-11
