The indicator summary remains positive, but cracks in the bullish case are starting to appear. It all started with relative weakness in small-caps and the consumer discretionary sector, two important areas of the market. This week we saw DIA, QQQQ and SPY eke out new 52-week highs, but MDY and IMW fell short. Relative weakness in small-caps and mid-caps is a warning sign. We have, however, yet to see any serious breakdowns on the price charts or in breadth. The AD Lines and AD Volume Lines remain in uptrends. A small bearish divergence is taking shape in the NYSE AD Volume Line though. Again, the warning signs are here, but actual trend reversals based on weakness have yet to appear. You can read more on Art's Charts here. Details after the jump.
- AD Lines: Bullish. The NYSE AD Line hit a new 52-week high this week, but the Nasdaq AD Line fell short. Both are in uptrends overall.
- AD Volume Lines: Bullish. The Nasdaq and NYSE AD Volume Lines bounced this week and remain in uptrends.
- Net New Highs: Bullish. Net New Highs for the Nasdaq and NYSE remained in positive territory and the Cumulative Net New Highs lines continued higher this week.
- Bullish Percent Indices: Bullish. All Bullish Percent Indices are above 50%. At 73.33%, the info tech sector has the least strong Bullish Percent Index.
- VIX/VXN: Bullish. The S&P 500 Volatility Index ($VIX) and the Nasdaq 100 Volatility Index ($VXN) are testing their December-January lows. A surge above the January would reverse the downtrends in volatility (risk/fear) and be bearish for stocks.
- Trend Structure: Bullish. DIA, QQQQ and SPY hit 52-week highs (intraday) on Thursday. MDY and IWM fell short as mid-caps and small-caps show some short-term relative weakness.
- SPY Momentum: Bullish. MACD(5,35,5) remains in positive territory. RSI is above 50. The Aroon Oscillator is firmly in positive territory.
- Offensive Sector Performance: Neutral. The Technology ETF (XLK) has been lagging since early November and the Consumer Discretionary SPDR (XLY) has been lagging since late November, but the Industrials SPDR (XLI) and Finance SPDR (XLF) continue to show relative strength.
- Nasdaq Performance: Neutral. The $COMPQ:$NYA ratio broke its December low and the Nasdaq is starting to underperform the NY Composite ($NYA).
- Small-cap Performance: Bearish. The $RUT:$OEX ratio peaked in mid December and moved sharply lower in 2011. Small-caps are showing relative weakness this year.
- Breadth Charts (here) and Inter-market 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 balance of power (bull/bear) within the stock market. With 10 indicator groups, the medium-term evidence is unlikely to change drastically overnight. Previous turns include: Started on 11-Sept-09 as positive. Negative on 5-February-10. Positive on 5-March-10. Negative on 11-June-10. Positive on 18-June-10. Negative on 24-June-10. Positive on 6-August-10. Negative on 13-August-10. Positive on 3-September-10.
