There are no changes in the indicator summary because stocks remained strong this week. QQQ and XLK were dragged down by Apple, but the Nasdaq 100 Equal-Weight ETF (QQEW) hit a new high, which means the average tech stock is doing just fine. The NYSE AD Line remains on an upward tear. The Nasdaq AD Volume Line extended its surge, even without help from Apple. Net New Highs on the NYSE and the Nasdaq remain very strong. As noted last week, the only thing to fear is excessive bullishness and overbought conditions, which could lead to a pullback.
- AD Lines: Bullish. The Nasdaq AD Line broke the mid December high and March trend line to turn bullish in early January. The NYSE AD Line hit a new high and remains in a strong uptrend.
- AD Volume Lines: Bullish. The Nasdaq AD Volume Line broke above its September high in early January and the late December low marks key support. The NYSE AD Volume Line moved to a new high again this week and remains in a strong uptrend.
- Net New Highs: Bullish. Nasdaq Net New Highs have been strong all month and the cumulative line surged to new highs. NYSE Net New Highs are even stronger and the cumulative line has been rising since mid November.
- Bullish Percent Indices: Bullish. All nine sector Bullish Percent Indices are above 50%.
- VIX/VXN: Bullish. The S&P 500 Volatility Index ($VIX) moved to its lowest level since 2007. The Nasdaq 100 Volatility Index ($VXN) is trading below 15. It may seem excessive, but low volatility is positive for the stock market.
- Trend-Structure: Bullish. IWM, SPY, MDY, QQEW and DIA hit new 52-week highs again this week. Let's just leave QQQ out of this for now.
- SPY Momentum: Bullish. RSI is above 70 for the first time since mid September. MACD(5,35,5) remains in an uptrend and positive. Aroon surged above +50 in early December and remains positive.
- Offensive Sector Performance: Bullish. The Consumer Discretionary SPDR (XLY), Industrials SPDR (XLI) and Finance SPDR (XLF) hit 52-week highs again this week. Enough said.
- Nasdaq Performance: Bearish. The $COMPQ:$NYA ratio turned down again this month and moved to a 52-week low.
- Small-cap Performance: Bullish. The $RUT:$OEX ratio continues its surge and moved to its highest level since February 2012.
- Breadth Charts (here) and Inter-market charts (here) have been updated.
About the author:
Arthur Hill, CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London.
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