Needless to say, the indicator summary remains decidedly negative. With another sharp move lower this week, the SPY momentum indicators moved from neutral to bearish. The Nasdaq AD Line and NYSE AD Volume Line hit new lows this week. The volatility indices surged above 40 to confirm high levels of anxiety. Small-caps led the way lower as the $RUT:$OEX ratio moved to a new low. The only positive is that the Nasdaq is holding up better than the NY Composite.
- AD Lines: Bearish. The Nasdaq AD Line hit a 52-week low and remains in a clear downtrend. The NYSE AD Line broke below its September lows to signal a continuation of the downtrend that began in early August.
- AD Volume Lines: Bearish. The Nasdaq AD Volume Line plunged to its August lows. This establishes the September high as key resistance in the current downtrend. The NYSE AD Volume Line broke its August lows and the late August high now marks downtrend resistance.
- Net New Highs: Bearish. Net New Highs plunged to their lowest levels since early August as new 52-week lows surged. The Cumulative Net New Highs Lines have been below their 10-day EMAs, and in downtrends, since early August.
- Bullish Percent Indices: Bearish. Seven of the nine BPIs are below 50%. Only utilities (78.79%) and consumer staples (51.22%) remain above 50%. This confirms the defensive nature of the current market.
- VIX/VXN: Bearish. The CBOE Volatility Index ($VIX) and the Nasdaq 100 Volatility Index ($VXN) surged above 40 to signal another increase in fear (propensity to sell). We have yet to see the extremes of 2008 when both exceeded 80% in October.
- Trend Structure: Bearish. DIA, IWM, MDY, QQQ and SPY broke below their March-June lows to start downtrends in early August. With the most recent decline, IWM broke its August low to show relative weakness. The others remain above their August lows, but by no means show strength.
- SPY Momentum: Bearish. RSI moved into the 50-60 zone and then broke back below 40 this week. MACD(5,35,5) hit resistance at the zero line and turned down. The Aroon (20) moved below -50 to get back on the bearish track.
- Offensive Sector Performance: Bearish. The Finance SPDR (XLF) and Industrials SPDR (XLI) are leading lower with breaks below their August lows (new 52-week lows). The Consumer Discretionary SPDR (XLY) met resistance from broken support and turned sharply lower. Even techs succumbed to selling pressure, but the Technology ETF (XLK) is holding up better than the rest.
- Nasdaq Performance: Bullish. The $COMPQ:$NYA ratio hit another 52-week high this week as the tech-laden Nasdaq outperforms the finance-laden NY Composite.
- Small-cap Performance: Bearish. The $RUT:$OEX ratio broke below its August lows as small-caps led the market lower this month.
- 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
Neutral on 29-Jul-11
Negative on 5-August-11
