When does a short-term decline extend far enough to have medium-term or long-term consequences? That is the big question right now. As far as I can tell, the May decline has yet to do enough technical damage to change the medium-term outlook (2-6 months). As the indicator summary shows, the bulk of the evidence remains bullish. The NYSE AD Line hit a new high on Tuesday. The NYSE and Nasdaq AD Volume Lines remain in uptrends overall. New lows have yet to expand significantly. On the price charts, I am watching the April lows for the major index ETFs. A break below these lows would likely do enough technical damage to reverse the medium-term uptrend. Keep in mind that this indicator summary works like a trend-following indicator. It is not going to pick bottoms or tops. Instead, it turns bullish or bearish when enough evidence builds one way or another. See the About Page for details on Art's Charts.
- AD Lines: Neutral. The Nasdaq AD Line failed to confirm the April high in the Nasdaq and broke below its March low. The NYSE AD Line hit a new high on Tuesday and remains in an uptrend overall.
- AD Volume Lines: Bullish. The Nasdaq AD Volume Line met resistance at its February high, but remains in an uptrend overall. The NYSE AD Volume Line edged above its February high in late April and remains in an uptrend.
- Net New Highs: Bullish. The Cumulative Net New Highs Line for the Nasdaq moved back above its 10-day EMA and the NYSE version remains above its 10-day EMA.
- Bullish Percent Indices: Bullish. All but one Bullish Percent Index is above 50. The Energy Bullish% Index ($BPENER) is at 49.72%.
- VIX/VXN: Bullish. Despite the big market plunge, the S&P 500 Volatility Index ($VIX) and the Nasdaq 100 Volatility Index ($VXN) are below 20 and have yet to break resistance.
- Trend Structure: Bullish. The major index ETFs have been falling since early May 2011, but rising since June 2010. The big trend remains up as support levels on the daily charts have yet to be broken.
- SPY Momentum: Bearish. MACD(5,35,5) is negative, Aroon(20) is below -50. RSI is below 50.
- Offensive Sector Performance: Neutral. The Finance SPDR (XLF) and Industrials SPDR (XLI) are showing relative weakness. The Consumer Discretionary SPDR (XLY) and the Technology ETF (XLK) are holding their own as both remained above their April lows (split decision).
- Nasdaq Performance: Bullish. The $COMPQ:$NYA ratio has been rising since late March and remains in a three month uptrend.
- Small-cap Performance: Bullish. The $RUT:$OEX ratio has been flat since early April, but trending higher since January. A move below the May lows would show relative weakness
- 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 buying and selling pressure. With 10 indicator groups, the medium-term evidence is unlikely to change drastically overnight.
Previous turns include:
Positive on 11-Sept-09
Negative on 5-Feb-10
Positive on 5-March-10
Negative on 11-Jun-10
Positive on 18-Jun-10
Negative on 24-Jun-10
Positive on 6-Aug-10
Negative on 13-Aug-10
Positive on 3-Sep-10
Negative on 18-Mar-11
Positive on 25-Mar-11
