The indicator summary got another upgrade this week as SPY momentum improved. All indicators are in bull mode and the majority have been bullish since early December, which is one long run for bullish technicals. The NYSE AD Line is the lone laggard because it has yet to clear its May-July high. The NY Composite ($NYA) recorded a new high this month so a bearish divergence may be brewing, but I would not read too much into this because it is just one indicator and it is pretty close to a new high.
- AD Lines: Bullish. The Nasdaq AD Line surged to a new high this week. The NYSE AD Line surged to its May-July highs this month, but has yet to exceed these highs.
- AD Volume Lines: Bullish. The Nasdaq AD Volume Line and the NYSE AD Volume Line moved to new highs this week.
- Net New Highs: Bullish. Net New Highs expanded this week and the cumulative Net New Highs lines for the Nasdaq and NYSE moved to new highs.
- Bullish Percent Indices: Bullish. All nine sector Bullish Percent Indices are above 50%.
- VIX/VXN: Bullish. The S&P 500 Volatility Index ($VIX) and the Nasdaq 100 Volatility Index ($VXN) fell back below 15% and remain a low levels overall.
- Trend-Structure: Bullish. DIA, IWM, QQQ, QQEW and SPY recorded new highs this week. MDY is challenging its August high.
- SPY Momentum: Bullish. RSI moved back above 60 and MACD(5,35,5) turned positive last week. The Aroon Oscillator joined the party with a move above +50 this week.
- Offensive Sector Performance: Bullish. XLI, XLK and XLY recorded new highs this week. XLF is lagging a bit because it has yet to exceed its August high.
- Nasdaq Performance: Bullish. The $COMPQ:$NYA ratio remains in an uptrend overall, but declined in September as the Nasdaq underperformed the last three weeks.
- Small-cap Performance: Bullish. The $RUT:$OEX ratio hit a new high last week and remains in an uptrend.
- Breadth charts (here) and intermarket charts (here) have been updated.
This commentary and charts-of-interest are designed to stimulate thinking. This analysis is
not a recommendation to buy, sell, hold or sell short any security (stock ETF or otherwise).
We all need to think for ourselves when it comes to trading our own accounts. First, it is
the only way to really learn. Second, we are the only ones responsible for our decisions.
Think of these charts as food for further analysis. Before making a trade, it is important
to have a plan. Plan the trade and trade the plan. Among other things, this includes setting
a trigger level, a target area and a stop-loss level. It is also important to plan for three
possible price movements: advance, decline or sideways. Have a plan for all three scenarios
BEFORE making the trade. Consider possible holding times. And finally, look at overall market
conditions and sector/industry performance.
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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