Art's Charts

Video - Weekly Market Review & Outlook - Plotting the High-Low Line for Small-caps


Small-Cap High-Low Line is Still Rising 

The bulk of the evidence remains bullish for stocks, but small-caps and mid-caps continue to drag their feet. The chart below shows the cumulative High-Low Line for S&P SmallCap High-Low Percent ($SMLHLP) with the 10-day EMA (pink). Notice that the High-Low Line is still rising and above its 10-day EMA. This is bullish and still shows that new highs are outpacing new lows within the S&P Small-Cap 600. A move below the 10-day EMA would signal a downturn in the High-Low Line and weakness in High-Low Percent. 

Chartists can also measure the distance between the High-Low Line and the 10-day EMA using MACD(1,10,1). MACD is positive when the High-Low Line (1-day EMA) is above the 10-day EMA. A MACD move below zero would signal a downturn in the High-Low Line. Chartists can also plot High-Low Lines for S&P 1500 High-Low Percent ($SUPHLP), S&P 500 High-Low% ($SPXHLP), S&P 400 High-Low% ($MIDHLP) and Nasdaq 100 High-Low% ($NDXHLP). Click on the chart below to open it as a SharpChart and change the main symbol.  

-----  Written Commentary  -----  Art's Charts ChartList (updated 13-May)   -----     

Despite a big stall in the S&P SmallCap iShares (IJR) and S&P MidCap SPDR (MDY), large-caps continue to hold up and SPY is holding its latest breakout. In particular, I am watching the gaps created on April 24th and 25th because these triggered breakouts in SPY, MDY, IJR and several other ETFs. A close below the April 21st close would fill these gaps and negate the breakouts. I am also watching bonds for clues because the 20+ YR T-Bond ETF (TLT) fell over the last three weeks and then popped on Friday. This key bond benchmark is at a potential reversal zone and an upside breakout could have negative ramifications for stocks and the finance sector, and positive ramifications for the utilities sector and gold. 


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--Arthur Hill CMT

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Arthur Hill
About the author: , CMT, is the Chief Technical Strategist at 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. Learn More
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