With a few more downgrades this week, the indicator summary moved to zero. The March decline was enough to turn the indicator summary negative, but this decline was a mere correction within the bigger uptrend. With the indicator summary on the verge of turning negative again, I must wonder if this is just a correction (like March) or the start of a bigger decline. Whipsaws and bad signals are all part of the trading game. Even if the indicator summary turns negative, I would expect it to flip back into positive territory should the current six week decline reverse. Keep in mind that this indicator summary works like a moving average. It is a trend following system that can be prone to whipsaws. I simply use it to assess the current state of the market. Right now, the indicator summary suggests a standoff between bulls and bears. See the About Page for details on Art's Charts.
- AD Lines: Neutral. The Nasdaq AD Line failed to confirm the April high in the Nasdaq and broke below its March low. The NYSE AD Line hit a new high on May 31st and remains in an uptrend overall.
- AD Volume Lines: Bullish. The Nasdaq and NYSE AD Volume Lines have big double tops working, but have yet to break their March lows.
- Net New Highs: Neutral. Nasdaq Net New Highs moved to their lowest (negative) level since August. NYSE Net New Highs are hovering around the zero line.
- Bullish Percent Indices: Bullish. The Energy Bullish% Index ($BPENER) and the Materials Bullish% Index ($BPMATE) are both below 50%. The Technology Bullish% Index ($BPINFO) and the Industrials Bullish% Index ($BPINDY) are barely hanging on at 50.85%. Despite this weakness, the majority remains above 55%. Even the Finance Bullish% ($BPFINA) is at 57%.
- VIX/VXN: Bullish. Despite the decline of the last six weeks, the S&P 500 Volatility Index ($VIX) and the Nasdaq 100 Volatility Index ($VXN) are below 20 and have yet to break resistance.
- Trend Structure: Bullish. The major index ETFs have been falling since early May 2011 (6 weeks), but rising since June 2010 (12 months). All have broken their April lows, but remain above the March lows.
- 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 the last seven weeks.
- Nasdaq Performance: Bearish. The $COMPQ:$NYA ratio peaked in January and formed a lower high in May. The Nasdaq led the NY Composite lower over the last four weeks.
- Small-cap Performance: Bearish. The $RUT:$OEX ratio formed a lower high in May and broke below its May low with a sharp decline in June. Small-caps are showing relative strength since early April.
- 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
