With a massive eight day surge, the major index ETFs moved to new highs and the offensive sectors got back in gear. The AD Lines and AD Volume Lines also moved to new highs, and Net New Highs expanded once again. New highs are bullish, but the size of this move puts the market in a short-term overbought condition, yet again. The medium-term trend remains firmly up with the late February lows marking support for a number of indicators (AD Lines) and ETFs (QQQ).
- AD Lines: Bullish. The Nasdaq and NYSE AD Line surged to new highs in early March. The late February lows now mark key support.
- AD Volume Lines: Bullish. The Nasdaq and NYSE AD Volume Lines soared to new highs in early March. The late February lows now mark key support.
- Net New Highs: Bullish. Net New Highs surged again in early March and the cumulative Net New Highs lines moved to 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) fell back towards their February lows and remain well below 20%.
- Trend-Structure: Bullish. DIA, IWM, MDY, QQEW and SPY all hit new 52-week highs this week.
- SPY Momentum: Bullish. RSI bounced off the 40-50 support zone and MACD (5,35,5) remains positive. Aroon (20) dipped into negative territory in late February, but recovered with a move back into positive territory this week.
- Offensive Sector Performance: Bullish. Even though the defensive sectors hit new highs this week, I will give the offensive sectors their due because the Consumer Discretionary SPDR (XLY), Finance SPDR (XLF) and Industrials SPDR (XLI) hit new 52-week highs. The Technology SPDR (XLK) broke above its February highs and hit a new high for 2013.
- Nasdaq Performance: Bearish. The $COMPQ:$NYA ratio moved higher the last five weeks, but this is not enough to reverse the six month downtrend.
- Small-cap Performance: Bullish. The $RUT:$OEX ratio fell in late February, but rebounded the last eight days and remains in an uptrend since mid November.
- 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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