Stocks did not do much this week (as of Thursday) and there is no change in the indicator summary. The AD Lines and AD Volume Lines are in clear uptrends with new highs over the last few weeks. The offensive sectors are leading with XLF hitting a new high this week. Relative weakness in small-caps is the only concern at the moment, but it is a minor concern and IWM remains in an uptrend overall.
- AD Lines: Bullish. The Nasdaq and NYSE AD Lines hit new highs this year and remain in clear uptrends.
- AD Volume Lines: Bullish. The Nasdaq AD Volume Line hit a new high this year and remains in a strong uptrend. The NYSE AD Line hit a new high at the end of December.
- 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) both remain at the lower end of their ranges. Low volatility is positive for the market overall.
- Trend-Structure: Bullish. DIA, IWM, MDY, QQQ and SPY hit new highs in late December and remain in clear uptrends.
- 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 is leading with a new high this week. XLK, XLI and XLY hit new highs at the end of December.
- Nasdaq Performance: Bullish. The $COMPQ:$NYA ratio stalled from mid October to mid November and then surged to new highs in December as the Nasdaq resumed its outperformance.
- Small-cap Performance: Bullish. The $RUT:$OEX ratio bottomed in mid November and then zigzagged higher the last seven weeks. I will call this an uptrend as long as the December low holds.
- 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
