Evidence Remains Bullish, but Pockets of Weakness Remain

• AD Lines: Neutral. The Nasdaq AD Line pulled back in August, but remains well above its prior low and in an uptrend since November. The NYSE AD Line did not exceed its May high and remains range bound the last four months. The June low marks support.
• AD Volume Lines: Bullish. The Nasdaq AD Volume Line flattened in August, but remains in a clear uptrend. The NYSE AD Volume Line pulled back in August, but remains in an uptrend overall and well above the June low. 
• Net New Highs: Neutral. Nasdaq Net New Highs dipped briefly into negative territory and then bounced back above 2.5%. NYSE Net New Highs dipped below -2%, bounced above +2% for a brief moment last week and fell back this week. This indicator remains neutral at best.   
• Bullish Percent Indices: Bullish. All nine sector Bullish Percent Indices are still above 50%.
• VIX/VXN: Bullish. The S&P 500 Volatility Index ($VIX) and the Nasdaq 100 Volatility Index ($VXN) surged off their 2013 lows, but remain in downtrends overall. 
• Trend-Structure: Bullish. DIA, IWM, MDY, QQEW and SPY pulled back in August, but recorded 52-week highs at the beginning of the month and remain in uptrends overall.  
• SPY Momentum: Bearish. RSI dipped below 40 twice this month. MACD(5,35,5) moved into negative territory and the Aroon Oscillator broke well below -50.
• Offensive Sector Performance: Bullish. All sectors are down for the month of August, but three of the four offensive sectors are outperforming because they are down less than the S&P 500 (industrials, technology and consumer discretionary). The Finance SPDR (XLF) is the weakest of the nine sectors. 
• Nasdaq Performance: Bullish. The $COMPQ:$NYA ratio broke out in early May, hit a new high this week and remains in an uptrend as the Nasdaq outperforms the NY Composite. 
• Small-cap Performance: Bullish. The $RUT:$OEX ratio stalled for a few weeks and then surged to a new high last week. Small-caps continue to lead large-caps.
• 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.

This commentary and charts-of-interest are designed to stimulate thinking. This analysis is
not a recommendation to buy, sell, hold or sell short any security (stock ETF or otherwise).
We all need to think for ourselves when it comes to trading our own accounts. First, it is
the only way to really learn. Second, we are the only ones responsible for our decisions.
Think of these charts as food for further analysis. Before making a trade, it is important
to have a plan. Plan the trade and trade the plan. Among other things, this includes setting
a trigger level, a target area and a stop-loss level. It is also important to plan for three
possible price movements: advance, decline or sideways. Have a plan for all three scenarios
BEFORE making the trade. Consider possible holding times. And finally, look at overall market
conditions and sector/industry performance.