Stocks stalled the last four days, but this is not enough to affect the indicators, nine of which remain in bull mode. The major index ETFs are clearly overbought and the world is calling for a pullback, but we have yet to see it. I suspect we will get one sometime this month. On the SPY chart, note that RSI moved back below 70 and the MACD(5,35,5) moved below its signal line. A pullback at this stage would be healthy and could set up another opportunity to partake in the uptrend, which is currently long in the tooth (old).
- AD Lines: Bullish. The Nasdaq AD Line broke the mid December high and April trend line to turn bullish in early January. The NYSE AD Line hit a new high in late January 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 in late January and remains in a strong uptrend.
- Net New Highs: Bullish. Net New Highs fell back this week, but remain positive and the cumulative lines recorded new highs.
- Bullish Percent Indices: Bullish. All nine sector Bullish Percent Indices are above 50%.
- VIX/VXN: Bullish. The S&P 500 Volatility Index ($VIX) and the Nasdaq 100 Volatility Index ($VXN) are below 15% and in downtrends.
- Trend-Structure: Bullish. IWM, SPY, MDY, QQEW and DIA hit new 52-week highs in late January. They may be overbought, but they are clearly in uptrends.
- SPY Momentum: Bullish. RSI fell back below 70, which may suggest that a corrective period is nearing. MACD(5,35,5) also moved below its signal line. Aroon remains well above 50 and has been positive since the first week of December.
- Offensive Sector Performance: Bullish. The offensive sectors (sans XLK) are outperforming on the one and three month timeframes. Note that the Nasdaq 100 Equal-Weight ETF (QQEW) is also outperforming on these timeframes.
- Nasdaq Performance: Bearish. The $COMPQ:$NYA ratio turned down again this month and moved to a 52-week low in late January.
- Small-cap Performance: Bullish. The $RUT:$OEX ratio has been on a tear since mid November as small-caps outpace large-caps. This ratio, however, may be getting overextended.
- 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.
Learn More
