Even though the indicator summary remains unchanged this week, there was some strengthening under the hood this week. Notably the NYSE Net New Highs Line continues to rise and shows no signs of weakness. The AD Volume Lines bounced this week and are on the verge of trend changing breakouts. Further strength above the early December highs would do the trick. The NYSE AD Line is also showing potential here with a higher low. Even though the indicator total is -2, eight of the nine sector Bullish Percent Indices are above 50%. It is quite unusual to see such strength here, but an indicator total of -2. Relative weakness in the Nasdaq is to blame as the Cumulative Net New Highs Line continues to fall, the AD Line remains exceptionally weak and the Nasdaq underperforms the NY Composite.
- AD Lines: Neutral. The Nasdaq AD Line hit a new low this month and remains in a strong downtrend. The NYSE AD Line has been flat since May with a lower high in mid November and a higher low in late November. The bulls get the benefit of the doubt as long as the late November low holds.
- AD Volume Lines: Bearish. The Nasdaq AD Volume Line formed lower lows and lower highs the last two months. A break above the early December high is needed to turn bullish. The NYSE AD Volume Line remains in a downtrend overall, but shows some strength with this week's surge. A break above the early December high would be bullish.
- Net New Highs: Neutral. Nasdaq Net New Highs remain negative and the Cumulative Net New Highs Line is below its 10-day EMA. NYSE Net New Highs, however, surged above 5% this week and the Cumulative Net New Highs line has been rising since mid October.
- Bullish Percent Indices: Bullish. Eight of the nine BPIs remain above 50%. The energy and materials Bullish Percent Indices are the only two below 50%.
- VIX/VXN: Bullish. It may be just a seasonal thing, but the CBOE Volatility Index ($VIX) and the Nasdaq 100 Volatility Index ($VXN) are trending down and both broke below their late October lows this month.
- Trend Structure: Neutral. The major index ETFs recovered from the mid November swoons and formed inverse Head-and-Shoulders patterns that extend from late October to now. Breaks above the early December highs would confirm these bullish continuation patterns.
- SPY Momentum: Bearish. RSI is still below 60 (57) and the Aroon Oscillator is still below 50 (+40), but both are close to breakouts. MACD(5,35,5) moved back into positive territory this week.
- Offensive Sector Performance: Bearish. The Consumer Staples SPDR and Utilities SPDR (XLU) hit new 52-week highs this week, while the Healthcare SPDR broke above its late October highs. The four offensive sectors cannot make these claims and show relative weakness.
- Nasdaq Performance: Bearish. The $COMPQ:$NYA ratio moved below its late October low and remains in a downtrend as the Nasdaq continues to underperform the NY Composite.
- Small-cap Performance: Neutral. The $RUT:$OEX ratio surged in October and pulled back in late November. Overall, an inverse Head-and-Shoulders pattern has taken shape since August. A break above the November highs would show serious relative strength returning to small-caps.
- 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
Positive on 28-October-11
Negative on 23-November-11
Positive on 3-December-11
Negative on 16-December-11
