New highs say it all. The AD Lines and AD Volume Lines hit new highs. Four of the five major index ETFs also hit new highs, as did two of the four offensive sectors hit new highs. We can argue about overbought conditions and the odds of a pullback, but there is no arguing the overall uptrend.
- AD Lines: Bullish. The Nasdaq and NYSE AD Lines hit new highs this week and remain in clear uptrends.
- AD Volume Lines: Bullish. The Nasdaq and NYSE AD Volume Lines also hit new high this week.
- Net New Highs: Bullish. The cumulative Net New Highs lines for the Nasdaq and NYSE hit new highs this week. New highs continue to easily outpace new lows on both exchanges.
- Bullish Percent Indices: Bullish. All nine sector Bullish Percent Indices are above 50%.
- VIX/VXN: Bullish. The S&P 500 Volatility Index ($VIX) and Nasdaq 100 Volatility Index ($VXN) are near the low end of their twelve month ranges and volatility remains low.
- Trend-Structure: Bullish. SPY, IWM, QQQ and MDY Hit New Highs this week. DIA is lagging and has yet to break flag resistance.
- SPY Momentum: Bullish. RSI has been in its bull zone (40-80) since mid September and MACD(5,35,5) has been positive since early October. The Aroon Oscillator is lagging because it dipped below -50 in mid December and has yet to cancel this bearish signal with a surge above +50.
- Offensive Sector Performance: Bullish. XLF and XLK hit new highs and are leading the market. XLI broke flag resistance and is near its December high. XLY is lagging because of weakness in retail.
- Nasdaq Performance: Bullish. The $COMPQ:$NYA ratio hit a new high this year as the Nasdaq continues to outperform the NY Composite.
- Small-cap Performance: Bullish. The $RUT:$OEX ratio continues to work its way higher and remains in two month uptrend.
- Breadth charts (here) and intermarket 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
