The indicator summary got a couple more upgrades this week and remains in positive territory. In particular, the Trend-Structure indicator was upgraded to bullish because the Dow Industrials SPDR, S&P 500 ETF and Nasdaq 100 ETF broke above their early December highs. These breakouts could be reversed on Friday, but we can cross that bridge when and if it gets here. Elsewhere, I am still seeing lots of strength in NYSE breadth. Also notice that the Nasdaq AD Volume Line is perking up and QQQ is starting to show relative strength.
- AD Lines: Neutral. The Nasdaq AD Line hit a new low in December and remains in a strong downtrend. The NYSE AD Line formed a higher low in late November and surged above its early December high.
- AD Volume Lines: Neutral. The Nasdaq AD Volume Line surged in October, corrected in Nov-Dec and is now on the verge of a breakout that would signal a continuation of the October surge. The NYSE AD Volume Line is in an uptrend after forming a higher low in late November and breaking above its early December high.
- Net New Highs: Neutral. Nasdaq Net New Highs edged into positive territory, but the Cumulative Net New Highs Line has yet to turn up and break its 10-day EMA. NYSE Net New Highs have been largely positive since late November and the Cumulative Net New Highs Line remains in a strong uptrend.
- Bullish Percent Indices: Bullish. Eight of the nine BPIs remain above 50%. The Energy Bullish% Index ($BPENER) is the only one below 50%.
- VIX/VXN: Bullish. The CBOE Volatility Index ($VIX) and the Nasdaq 100 Volatility Index ($VXN) have been trending lower since early October. Decreasing volatility is positive for the stock market.
- Trend-Structure: Bullish. DIA, QQQ and SPY broke above their early December highs. IWM and MDY are battling resistance from the early December highs. Friday is going to be an important day as these breakouts either extend or fail.
- SPY Momentum: Bullish. RSI broke above 60 this week, the Aroon Oscillator surged above +50 in early December and MACD(5,35,5) is in positive territory.
- Offensive Sector Performance: Neutral. The Finance SPDR (XLF), Industrials SPDR (XLI) and Consumer Discretionary SPDR (XLY) broke their early December lows. The Technology SPDR (XLK) has yet to follow suit, but three of the four are showing strength.
- Nasdaq Performance: Bearish. The $COMPQ:$NYA ratio peaked in late September and remains in a downtrend. A break above the December high is needed for the Nasdaq to start showing relative strength.
- Small-cap Performance: Neutral. The $RUT:$OEX ratio peaked in early November and has been trading flat the last two months. A break above the December high is needed for small-caps to start showing relative strength.
- 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
Positive on 30-December-11
