Last week's indicator review noted signs of marketplace strength, only too roughly concerns on the horizon with honor to coin flows into Dow stocks together with the cumulative NYSE TICK. This calendar week features much of the same, only with a few to a greater extent than cautionary notes regarding the cost strength.
The exceed nautical chart requires roughly explaining. I of late posted coin flows from the x nigh highly weighted stocks inside 8 S&P sectors: financial, consumer discretionary, energy, consumer staples, technology, materials, industrials, together with wellness care. I combined the coin flows from those lxxx stocks (the specific issues are identified inwards the sector posts) to locomote into at an approximate of coin flows into together with out of the S&P 500 Index.
If you lot review those sector posts, you lot tin shipping away come across that at that spot are broad variations of coin stream from sector to sector. That tells us that nosotros are non seeing coin beingness seat to operate inwards the marketplace inwards a broad-based fashion. Across the sectors, however, selling delineate per unit of measurement area (money outflow) has been waning, which you lot tin shipping away come across inwards the exceed nautical chart from the rising lows inwards the five-day stream figures. Moreover, since the outset of April, nosotros convey seen rather consistent flows into the S&P 500 stocks. To this point, flows are confirming the cost highs that we've been seeing, only at that spot are notable laggards alongside sectors--hardly a vigorous bull move.
This selective nature of the recent cost forcefulness tin shipping away live observed inwards the novel high/new depression information (middle chart). Note that, during the recent motility to cost highs inwards SPY, novel 20-day highs minus lows convey been lagging. Moreover, this non-confirmation continues to demo upwards inwards our cumulative NYSE TICK mensurate (bottom chart). Last week's indicator review highlighted the importance of the 1400 surface area every bit long-term resistance inwards the S&P 500 Index. If nosotros are to sustain a bring out inwards a higher house that level, nosotros demand to come across indications of expanding participation inwards the strength. While nosotros *are* seeing expanded coin flows across the sectors, the variability from sector to sector; the lagging number of stocks registering novel highs; together with the lagging cumulative TICK give this bull motility something of a yellowish caution light.
Here's a quick await at other indicators together with what nosotros mightiness glean from them:
* Treasury involvement rates convey risen sharply inwards the by week, peculiarly at the curt end. There is growing speculation that the Fed may bring out afterward 1 lastly involvement charge per unit of measurement cutting this week. This is dollar supportive, only it too suggests that marketplace participants are weighing the possibility that we're dealing with a normal recessionary economy, non a deflationary 1 requiring Japanese-style quantitative easing. It too indicates a much reduced demand for the flight-to-safety trade, which frees upper-case alphabetic quality for stocks.
* My Cumulative Demand/Supply measure, which has nicely tracked intermediate-term marketplace peaks together with valleys, is moderately overbought at a reading of +22. Readings of +30 together with inwards a higher house convey corresponded to 20-day periods of subnormal functioning inwards the S&P 500 Index. We hitting that +30 grade dorsum on Apr 18th. Interestingly, the recent cost highs inwards SPY convey occurred at lower levels inwards the Cumulative DSI, suggesting 1 time once again that fewer stocks convey been displaying rigid upside momentum every bit we've moved to the 1400 grade inwards the June ES contract.
* We're seeing a continued expansion of stocks trading inwards a higher house their 200-day moving average. Among the S&P 500 issues, 46% are instantly inwards a higher house their 200-day averages, the highest grade of 2008. That proportion is 39% for S&P 600 modest cap issues, which convey lagged a fleck recently.
* Fri saw 51 novel 52-week highs alongside NYSE mutual stocks together with 23 novel annual lows. That is significantly less than the over 100 novel 52-week highs registered the prior week. I'm watching this closely; nosotros demand to come across expanding novel highs if the bull motility is to live sustained.
* We maintain to come across technical forcefulness inside my handbasket of twoscore stocks, with 27 issues trading inwards uptrends, iv neutral, together with nine inwards downtrends. This is downwards from lastly week's peak, only soundless robust.
The bottom business is that nosotros *are* seeing reduced selling inwards stocks together with selective increased buying. How selective the buying remains--or how it tin shipping away broaden out from here--will nation the story of whether nosotros autumn dorsum into the multi-month trading hit or sustain an intermediate-term motility to novel highs.
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