The indicator summary remains positive overall, but there are clearly some bearish undercurrents at work. Namely, the Nasdaq and technology sector are underperforming and showing relative weakness. The $COMPQ:$NYA ratio broke down this past week and the Technology SPDR (XLK) is the weakest of the nine sectors over the last five weeks. Also note that the Nasdaq AD Volume Line broke support and is now in a downtrend. These pockets of weakness could spread, but the bulk of the evidence still favors the bulls right now. The Finance SPDR (XLF) is showing relative strength, NYSE Net New Highs are still positive and the NYSE AD Line remains in a clear uptrend.
- AD Lines: Bullish. The Nasdaq AD Line fell back sharply the last four weeks, but remains in an uptrend that started in early June. The NYSE AD Line hit a new high in mid September and then flatted over the last four weeks.
- AD Volume Lines: Neutral. The Nasdaq AD Volume Line formed a large bearish divergence and broke support with a sharp decline the last four weeks. The NYSE AD Volume Line hit resistance from its spring high and pulled back the last four weeks, but remains in an uptrend since early June.
- Net New Highs: Bullish. Nasdaq Net New Highs dipped into negative territory and recorded their most negative reading since early August. The cumulative line, however, remains in an uptrend and above its 10-day EMA. NYSE Net New Highs fell sharply, but remain positive.
- Bullish Percent Indices: Bullish. Eight of the nine sector BPIs remain above 70%. The Technology Bullish% Index ($BPINFO) is the "least strong" with a 62.03% reading. The Nasdaq BPI is also relatively low at 57.86%.
- VIX/VXN: Bullish. The S&P 500 Volatility Index ($VIX) and the Nasdaq 100 Volatility Index ($VXN) bounced near the 15% level in mid August and mid September, but remain in downtrends overall. A break above the 4-Sep high is needed to reverse this downtrend and signal an uptrend in fear, which could stoke selling pressure.
- Trend-Structure: Bullish. DIA, IWM, MDY, QQQ and SPY recorded 52-week highs in September and pulled back over the last four weeks. So far, this is just a pullback within a bigger uptrend.
- SPY Momentum: Bullish. RSI moved into the 40-50 zone and Aroon turned negative. A break below 40 in RSI and -50 in Aroon would be bearish. MACD(5,35,5) is still positive.
- Offensive Sector Performance: Neutral. XLY and XLF are holding their own, but XLK and XLI remain relatively weak.
- Nasdaq Performance: Bearish. The $COMPQ:$NYA ratio broke below the April-July lows and remains in a downtrend as the Nasdaq underperforms the NY Composite. This shows an aversion for high-beta stocks.
- Small-cap Performance: Bearish. The $RUT:$OEX turned down in mid September and remains in a bigger downtrend since February.
- Breadth Charts (here) and Inter-market charts (here) have been updated.
Previous turns include:
Positive on 6-July-12
Negative on 18-May-12
Positive on 30-December-11
Negative on 16-December-11
Positive on 3-December-11
Negative on 23-November-11
Positive on 28-October-11
Negative on 5-August-11
Neutral on 29-Jul-11
Positive on 30-Jun-11
Negative on 17-Jun-11
Positive on 25-Mar-11
Negative on 18-Mar-11
Positive on 3-Sep-10
Negative on 13-Aug-10
Positive on 6-Aug-10
Negative on 24-Jun-10
Positive on 18-Jun-10
Negative on 11-Jun-10
Positive on 5-March-10
Negative on 5-Feb-10
Positive on 11-Sept-09