Even though the major index ETFs have yet to break down or show serious weakness, chartists should stay vigilant because the market is not firing on all cylinders right now. There were three downgrades this week, but the indicator summary remains positive overall. The AD Lines remain split with the NYSE AD Line in a clear uptrend and the Nasdaq AD Line in a downtrend since February. The AD Volume Lines were downgraded because they are range bound throughout 2011 and well below their May highs. In fact, both are also below their early July highs and closer to major support than major resistance. Offensive sector performance was downgraded because the industrials and finance sectors are lagging. And finally, small-cap performance was downgraded because small-caps show relative weakness over the last 1-2 weeks.
- AD Lines: Neutral. The Nasdaq AD Line remains in a downtrend overall, but the NYSE AD Line hit a new high this month and remains bullish.
- AD Volume Lines: Neutral. The AD Volume Lines briefly broke their March lows, but moved right back above with a positive breadth surge. Even so, they remain in large trading ranges this year and well below their May highs.
- Net New Highs: Bullish. Net New Highs surged in late June and early July. The Cumulative Net New Highs Lines are above their 10-day EMAs.
- Bullish Percent Indices: Bullish. All nine sector Bullish Percent Indices are above 50%.
- VIX/VXN: Bullish. The CBOE Volatility Index ($VIX) and Nasdaq 100 Volatility Index ($VXN) remain flat and below 25. There is neither fear nor complacency evident in these indicators.
- Trend Structure: Bullish. DIA and QQQ are challenging their 2011 highs. SPY is also strong, but MDY and IWM are lagging somewhat.
- SPY Momentum: Bullish. RSI surged above 50 and MACD(5,35,5) moved into positive territory late last month. Aroon (20) moved above +50 in early July.
- Offensive Sector Performance: Neutral. The consumer discretionary and technology sectors are performing well, very well. Finance and Industrials are lagging over the last few months.
- Nasdaq Performance: Bullish. The $COMPQ:$NYA hit a new 52-week high this month as the Nasdaq led the NY Composite higher over the last few weeks.
- Small-cap Performance: Neutral. The $RUT:$OEX ratio exceeded its May-June highs the first week of July, but fell sharply the last six trading days as small-caps underperformed during the latest market surge.
- 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
Positive on 30-Jun-11
