The major index ETFs are holding their March lows and there is no change in the indicator summary. The AD Volume Lines are also testing support from the March lows. In fact, both bounced sharply this week and are now back above their March lows. Even so, I will wait for a confirming signal from the 50-day EMA of the Net Advancing Volume Ratio. This indicator needs to turn positive. Admittedly, the stock market is a very tough call right now. Many indicators are at their make-or-break points. Some broke down, some didn't, some broke down and then recovered and some remain bearish. We could be in for a choppy summer with little direction in the stock market. As noted below, this indicator summary is my subjective assessment of 10 indicator groups. It is not meant to call market bottoms or tops, but rather acts as an assessment of current market conditions. In fact, this summary acts more like a moving average, which is a lagging indicator that works best in strong sustained trends, such as that seen from September to April. Why use this indicator summary? I use this to take me through the analysis process. It serves as my checklist of key indicator groups covering breadth, momentum, trend, sentiment and relative performance. In fact, maybe it would be better if I left the summary with the bull-bear ratings and removed the numbers with the total. Opinions?
- AD Lines: Neutral. The Nasdaq AD Line formed a bearish divergence in February-April and clearly broke down in May. The NYSE AD Line remains above its April low and still in an uptrend overall.
- AD Volume Lines: Bearish. The Nasdaq AD Volume Line broke its March low and the 50-day EMA of the Net Advancing Volume Ratio ($NAUD:$NATV) is below resistance. The NYSE AD Volume Line broke its March low, but recovered to ultimately hold it. However, the 50-day EMA of the Net Advancing Volume Ratio ($NYUD:$NYTV) remains in a downtrend and negative.
- Net New Highs: Neutral. Nasdaq Net New Highs briefly moved into positive territory this week, but the 10-day EMA remains negative. NYSE Net New Highs are still largely positive and the 10-day EMA has yet to turn negative.
- Bullish Percent Indices: Bullish. Three of the nine sector Bullish Percent Indices are below 50% (energy, technology, materials). The Industrials BPI is at 50%. The rest (5 of 9) are above 50%.
- VIX/VXN: Bullish. The CBOE Volatility Index ($VIX) and Nasdaq 100 Volatility Index ($VXN) have yet to break above 25%, which would show real fear and an increase selling pressure.
- Trend Structure: Bullish. QQQ, SPY, MDY and IWM are testing their March lows, which mark key support. DIA remains above the March low.
- SPY Momentum: Bearish. MACD(5,35,5) is negative, Aroon(20) is below -50. RSI is below 50.
- Offensive Sector Performance: Bearish. The four offensive sectors (finance, consumer discretionary, technology, industrials) all broke their April lows and led the market lower since early May.
- Nasdaq Performance: Bearish. The $COMPQ:$NYA ratio surged over the last few days, but remains flat for the year (2011).
- Small-cap Performance: Bearish. The $RUT:$OEX ratio surged the last two weeks as small-caps outperformed, but this Price Relative has been falling since early April and remains short of a breakout.
- 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
Negative on 17-Jun-11
