The bulk of the evidence remains bullish for the stock market. In fact, I have even seen some strengthening in the bullish case over the past week. The Nasdaq AD Volume Line is challenging its Sep-Oct highs so I upgraded the AD Volume Lines from bearish to neutral. I also upgraded the small-cap versus large-cap indicator from bearish to bullish because the Russell 2000 has been outperforming the S&P 500 in December. Small-caps have also outperformed large-caps since early March.
The rest of the indicators remain the same. New 52-week highs continue to exceed new 52-week lows. The NYSE AD Line hit a new high for the year. The Bullish Percent Indices are all at or above 50%. The major index ETFs continue to consolidation within utprends. Key momentum indicators remain above their centerlines. Three of the four offensive sectors remain in clear uptrends. Finance remains the laggard and this explains relative weakness in the NYSE AD Volume Line. The Dollar-Bond indicator is split because a rising Dollar may weigh negatively on stocks. This is offset by falling bond prices and rising yields, which are traditionally bullish for stocks. All in all, I continue to see more evidence of buying pressure than selling pressure.
This table was designed to offer an objective look at market conditions. It does not aim to pick tops or bottom. Instead, it seeks to identify noticeable shifts in buying and selling pressure. As long as buying pressure is stronger than selling pressure, I expect the market to continue higher. I first started this table on September 11th and the bulk of the evidence has been bullish ever since.
*****************************************************************
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.
Learn More
