There is no change in the indicator table. Relative weakness in interest rate sensitive stocks is weighing on the NYSE as the NYSE AD Line and NYSE Net New Highs lag their Nasdaq counterparts. Stocks remain in corrective mode, but there are clear pockets of strength out there. Notice that the Nasdaq AD Volume Line moved to a new high and techs are starting to outperform.
- AD Lines: Neutral. The Nasdaq AD Line pulled back in August, but remains well above its prior low and in an uptrend since November. The NYSE AD Line did not exceed its May high and remains range bound the last four months. The June low marks support.
- AD Volume Lines: Bullish. The Nasdaq AD Volume Line moved to a new high this week. The NYSE AD Volume Line pulled back in August, but remains in an uptrend overall and well above the June low.
- Net New Highs: Neutral. Nasdaq Net New Highs dipped briefly into negative territory in mid August and then bounced back above 2.5% twice over the last two weeks. NYSE Net New Highs dipped below -2% in mid August and bounced back into positive territory, but still look weak overall.
- Bullish Percent Indices: Bullish. All nine sector Bullish Percent Indices are still above 50%.
- VIX/VXN: Bullish. The S&P 500 Volatility Index ($VIX) and the Nasdaq 100 Volatility Index ($VXN) moved higher the last few weeks, but remain range bound overall with the 2013 highs marking resistance.
- Trend-Structure: Bullish. DIA, IWM, MDY, QQEW and SPY pulled back the last five weeks, but recorded 52-week highs at the beginning of August and remain in uptrends overall.
- SPY Momentum: Bearish. RSI dipped below 40 twice in August. MACD(5,35,5) moved into negative territory and the Aroon Oscillator broke below -50 in mid August.
- Offensive Sector Performance: Bullish. Overall, the offensive sectors are outperforming on the one and three month timeframes. The consumer staples and utilities sectors are especially weak.
- Nasdaq Performance: Bullish. The $COMPQ:$NYA ratio broke out in early May, hit a new high in late August and remains in an uptrend as the Nasdaq outperforms the NY Composite.
- Small-cap Performance: Bullish. The $RUT:$OEX ratio stalled for a few weeks and then surged to a new high in late August. Small-caps continue to lead large-caps.
- Breadth Charts (here) and Inter-market charts (here) have been updated.
This table is designed to offer an objective look at current market conditions. It does not aim to pick tops or bottoms. Instead, it seeks to identify noticeable shifts in buying and selling pressure.
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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