There is no change in the indicator summary. Nine of ten indicator groups are in bear mode. The NYSE AD Volume Line broke down last week. Small-caps show relative weakness as the $RUT:$OEX ratio hit a new low this month. The CBOE Volatility Index ($VIX) remains at relatively high levels, which indicates a relatively high level of anxiety in the market place. The evidence suggests that selling pressure remains stronger than buying pressure and this favors further downside – until proven otherwise.
- AD Lines: Bearish. The Nasdaq AD Line hit a 52-week low this month and remains in a clear downtrend. After breaking down in early August, the NYSE AD Line formed a lower high in late August and continued lower in September.
- AD Volume Lines: Bearish. The Nasdaq AD Volume Line broke down in early August and consolidated the last 7-8 weeks. A consolidation after a breakdown favors a downtrend. The NYSE AD Volume Line also broke down in early August and then consolidated. However, this indicator broke its August lows last week to signal a continuation lower.
- Net New Highs: Bearish. New lows continue to outpace new highs on both the NYSE and the Nasdaq. The Cumulative Net New Highs Lines are falling and below their 10-day EMAs.
- Bullish Percent Indices: Bearish. Eight of the nine BPIs are below 50%. Only utilities (78.79%) and consumer staples (51.22%) remain above 50%. This confirms the defensive nature of the current market.
- VIX/VXN: Bearish. The CBOE Volatility Index ($VIX) and the Nasdaq 100 Volatility Index ($VXN) surged above 30 and consolidated in the 30-48 range the last eight weeks. Fear remains at relatively high levels and this is more conducive to selling pressure.
- Trend Structure: Bearish. QQQ was the only major index ETF to break above its mid August highs in September. The mere mortal ETFs, DIA, IWM, MDY and SPY, formed lower highs in mid September and have simply consolidated since early August. More importantly, the August breakdowns in the major index ETFs remain in play to set the overall bearish tone.
- SPY Momentum: Bearish. RSI moved into the 50-60 zone and then broke back below 40 last 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. Technology shows some signs of life, but the industrials and finance sectors remain weak. The consumer discretionary sector has edged higher since early August, but the pattern on the weekly chart looks like a bear flag.
- Nasdaq Performance: Bullish. The $COMPQ:$NYA ratio hit another 52-week high last week but fell sharply this week as selling pressure hit the Nasdaq.
- Small-cap Performance: Bearish. The $RUT:$OEX ratio broke to new lows this month as small-caps continue to lead the market lower. The canaries in the economic coal mine are not holding up well.
- 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
