Art's Charts

Video - Weekly Market Review & Outlook - Correction Evidence Builds


The stock market has been in correction mode since early March when looking at the EW S&P 500 ETF (RSP) and S&P MidCap SPDR (MDY). Together, these two ETFs represent 900 stocks and cover the majority of the market, and they have been flat since March 1st. Throw in a flat correction for the S&P Small-Cap 600 since December and this covers 1500 stocks. This correction, however, has been a bit stealthy because 254 of the stocks in the S&P 1500 are up more than 10% since March 1st. Thus, there are clearly plenty of nice winners since then. On the flip side, note than 327 stocks are down more than 10%. Thus, more stocks are down than up and this is net negative. Nevertheless, it is a stock pickers market because there are plenty of winners out there. As noted in Thursday's post, we just need to find them and put them in a ChartList.  

As today's video explains, evidence of a deeper correction in the stock market is building. The AD Volume Lines for the major indexes are falling, the percentage of stocks above the 200-day EMA is falling and stocks were hit with broad selling pressure on Wednesday. Stocks rebounded on Thursday-Friday and this kept the triangle breakout alive in the S&P 500 SPDR (SPY). I am watching this breakout zone because a close back below Wednesday's low would negate the breakout and suggest that the broad market correction is here. Such a signal would carry added weight because we will move into the weakest four-month period in June (System Trader article)

-----  Full Written Commentary   -----  Art's Charts ChartList (updated 20-May)   -----     


ETF Master ChartPack  - 300+ ETFs organized in a Master ChartList and in individual groups. 

Follow me on Twitter @arthurhill  - Keep up with my 140 character commentaries.

Thanks for tuning in and have a good day!
--Arthur Hill CMT

Plan your Trade and Trade your Plan

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
Subscribe to Art's Charts to be notified whenever a new post is added to this blog!
comments powered by Disqus