Weekend April 29, 2017
U.S. stocks ended the month higher, boosted by strong corporate earnings. The S&P 500 now sits about half a percentage point from all-time highs.
WSJ Weekend Edition
Yes but, recall a handful of stocks are driving the markets higher, here is the breadth picture.
Bullish Percent 50 day MA
Here is classic divergence. The SPX at top is hitting new highs. But the percent above their 50 day A is falling. If breadth were confirming the main chart would be hitting new highs.
Transports pull back from two MAs, and at a lower high than March 1. This is how it begins, with one average failing to confirm the advance of others. Notice the smaller 'bump' in CCI on this rise. It will take a few weeks but I am guessing the MAS will all come together before a real downturn, that should be a couple of months ahead.
Meanwhile the NDX is screaming
Here we go again with the NASD 100 surpassing its March 2000 high.
NASD 100 Monthly Back to the March 2000 high
Market in vertical position, further analysis not possible. How long will the mania last? this is the result of herding as the hedge fund managers chase the same group of stocks.
This reminds me of Ron White's comment, how long can the airplane fly on one engine?
Answer-All the way to the scene of the crash.
But again, the internals do not support this new high.
NASD Summation Index
If the NASD is at a new high the summation index should be as well, it is not at a new high.Again,divergence among the indicators.
I am not sure what is going on with interest rates and bond prices. After the FED hike, interest rates fell and bond prices rose. No opinion here.
John Murphy likes the 13 and 34 bar Exponential Moving Averages EMA for an indicator. I have been saying that Anaarko and Apache may be leading indicators of where the energy markets are heading. And so we have the EMAs threatening to cross lower. And CCI is over sold. Will these indicators go lower still, or is this support? We shall see.
Yikes APA has experienced a cross over to the downside, the 13 has dipped below the 34. This is quite negative. RSI at top could stay low and MACD at bottom
and not shown signs of reversing yet. Price wise we are at the last March thru August low 47.5-50, will support hold? Like any good Saturday morning serial at the movies, this will unfold over the next few weeks.
Likewise, XES energy service ETF is coming into potential support at 17. Again these are all valuable indicators and we will update as this unfolds.