Best Thread Market Breadth

[isatrader]

Attached is the long, medium and short term moving average breadth charts and the NYSE Bullish Percent Index. Since my last update two weeks ago the short term moving average breadth charts have all moved onto Bull Correction status after reaching the extreme top 10% of their ranges. This has now eased a bit with the average for the four now in the mid 80% range - which is still very high, but is not quite so one sided.

The NYSE Bullish Percent Index continues to push higher and currently 78.85% of stocks in the NYSE are on P&F buy signals. Dorsey did an article back in January 2012 that looked back over the history of the Bullish Percent Index and how long it stayed above the 70% level once it reached that point. The average time was 96 days over the last 25 years, and so as the index moved above 70% on 3rd Jan 2013, the average time would take it until mid April. But every time is different, and so we need to stay alert and prepare for when it next moves to defense as the risk continues to grow.

 

[isatrader]

US Industry Sectors Breadth

Over the last two weeks since my last sector update there hasn't been too much change overall, except for the Basic materials sector moving to a sell signal this week. The two week percentage change shows that seven of the nine sectors have moved lower over that time, but the moves have been reasonable small and hence the no change in the positions in the sector visual diagram.

Industrials and Financials remain the strongest sectors with over 80% of their stocks above their 150 day moving averages whereas Health Care and Basic Materials are the weakest sectors with only 57.32% and 61.39% of their stocks above their 150 day moving averages.

Below is the data table for the Percent of Stocks Above 150 Day Moving Average in each sector which I've ordered by relative strength, with the highest to the lowest percentage in each sector. Also attached is the visual diagram of the 9 sectors and the overall NYSE Percentage of Stocks above their 150 day Moving Averages, plus the 1% P&F chart and line chart of the nine sectors.

 

[isatrader]

Attached is the rest of this weeks breath charts which are a bit more mixed than they have been of late. My custom cumulative P&F breakouts minus breakdowns chart continues rising for another week with 25 more breakouts versus only 9 breakdowns in the S&P 500. It is however, slowing it's ascent, as the 20 day moving average is continuing to catch it up and this can be seen most clearly on the oscillator chart that measures the distance between the cumulative P&F breakouts minus breakdowns and it's 20 day MA. But for now it still suggests that the bulls are in control as more stocks breakout than breakdown.

A chart to note that had a change this week was the NYA/NYA50R ratio, which is the NYSE chart divided by the NYSE Percentage of Stocks above their 50 day MAs. This made a small close above it's 50 day MA which I use as a signal line. So this short term measure made a tentative move to a sell signal, but overall, although a bit more mixed the weight of evidence still seem to favour the bulls currently.

 

[kalott]

Bullish percent on ftse?

 

[isatrader]

Bullish percent on ftse?

I don't know of any free sites that cover it. I know that Dorsey Wright does it on their standard P&F subscription service and I believe Investors Intelligence do it as well on their subscription service. Otherwise you'd probably have to create it yourself. A suggestion that's easier to create in standard charting software and just as useful I find would be to create the Percentage of Stocks above their 150 day Moving Average chart for the FTSE 100. The FTSE 350 would be better though imo as it's gives you a bigger sample size.

So all you need to do is set up a scan that shows the amount of stocks that closed above their 150 day MA and then input each days data into a spreadsheet and calculate the percentage. Six months is enough to get started with and then you just need to keep it up to date, which takes 5 minutes each week. Hope that helps.

 

[Dentalfloss]

some stuff from Jason Levitt
New highs have consistently printed at a high level this year. An interesting development is the potential surge in new lows. Here’s the NYSE 52-week new lows. It’s normal for there to be new lows at all times because there will always be garbage stocks that don’t deserve to be publicly traded companies, but if new lows actually start to trend up, you have to wonder what’s going on – the market trading at new highs at the same time new highs and new lows are moving up? Three times this year the curve has gotten rejected by 60. I’m not making any predictions about a breakout or what will happen if it breaks out. I’ll just simply say it’ll be an interesting development. The market has been ignoring most technical indicators, so we can’t assume it’ll suddenly start listening to this one.

 

[isatrader]

some stuff from Jason Levitt
New highs have consistently printed at a high level this year. An interesting development is the potential surge in new lows. Here’s the NYSE 52-week new lows. It’s normal for there to be new lows at all times because there will always be garbage stocks that don’t deserve to be publicly traded companies, but if new lows actually start to trend up, you have to wonder what’s going on – the market trading at new highs at the same time new highs and new lows are moving up? Three times this year the curve has gotten rejected by 60. I’m not making any predictions about a breakout or what will happen if it breaks out. I’ll just simply say it’ll be an interesting development. The market has been ignoring most technical indicators, so we can’t assume it’ll suddenly start listening to this one.

Here's the chart so you can see what he's referencing. New Lows are the red area and new highs are the grey area.

Also attached is the four year chart of the 5 day total of new highs minus new lows in the US ($USHL5), which shows the proliferation of new highs since the beginning of the year.

 

[Dentalfloss]

from Jason Levitt

The market followed through yesterday and posted moderate, across-the-board losses. Wednesday was the single worst day since the November bottom, so the combination of Wednesday and Thursday are easily the worst two days since the market fell apart the first half of November.

But keep two things in mind. 1) The selling has mostly been due to the FOMC Minutes which revealed some Fed officials would rather take the punch bowl away sooner rather than later. All it would take is a few officials to come out and say the minutes were misinterpreted, and they’re committed to keeping rates low until the unemployment rate drops for the market to rebound. 2) But let’s say a top is forming. History says tops take time to form – easily several weeks and more often several months. There are usually several up and down moves that give the pros a chance to dump shares on the public before a downtrend begins.

My point is be careful in the near and intermediate term. The market can rally for a week and then sell off for a week and then rally for a week. Sentiment has certainly shifted in the very near term. On an intermediate term basis, I’m calling the market neutral. The S&P is unchanged over the last month, and we could easily settle into a tug-of-war battle for the next month. Long term the trend is of course solidly up. It takes more than two down days to change that.

Keep trades short term right now. Expect lots of up and down movement.

 

[malaguti]

Keep trades short term right now. Expect lots of up and down movement.

sound advice there!

 

[isatrader]

Attached is the long, medium and short term moving average breadth charts and the NYSE Bullish Percent Index. The short term moving average breadth charts continued to deteriorate this week and most gave high pole warnings and below their 50 day MAs on the line charts, which moves them to Bear Alert status imo. The medium term NYSE Percentage of Stocks above their 150 day Moving Averages chart also changed columns to Os on Thursday and so moved to Bull Correction status.

 

[isatrader]

US Industry Sectors Breadth

There was numerous changes this week for the first time this year with four more sectors moving below their 10 week MAs. Consumer Staples, Technology, Energy, Health Care all move to a sell signal and so the market is very mixed with four sectors still green and five now red.

Financials and Industrials remain the strongest sectors with over 80% of their stocks above their 150 day moving averages whereas Health Care and Basic Materials are the weakest sectors with only 55.94% and 52% of their stocks above their 150 day moving averages.

Below is the data table for the Percent of Stocks Above 150 Day Moving Average in each sector which I've ordered by relative strength, with the highest to the lowest percentage in each sector. Also attached is the visual diagram of the 9 sectors and the overall NYSE Percentage of Stocks above their 150 day Moving Averages, plus the 1% P&F chart and line chart of the nine sectors.

 

[isatrader]

And the rest...

Here's the rest of the weeks breadth charts I follow...

Notes:

• Cumulative P&F Breakouts - Breakdowns had it's first negative of the year with only 6 breakouts to 16 breakdowns. So -10 for the week, which has taken it 11.6 from it's 20 day MA which I use as a signal/action line, and it's been above since late November 2012.
• The six Advance Decline measures took a small hit, but nothing serious yet and so remain on buy signals imo.
• New Highs dropped back close to crossing below New Lows, but closed the week back above the 100 level.
• The NYSE Volume Advancing / Volume Declining Ratio had a spike in declining volume mid week, but Friday's advancing volume was fairly strong also and so is a mixed still imo.
• The short and medium term volatility breadth charts $NYA/$NYA50R and $NYA/$NYA150R both moved back above their 50 day MAs for the first time since November and so change to sell signals imo.
• The Put/Call ratio closed the week in bearish territory, and the $SPX/$CPC ratio has gone flat.
• The S&P 500 to US Treasuries ratio 1% reversal P&F charts both reversed to a column of Os.
• And finally the effective volume charts - The QQQ is now on a sell signal as it's dropped below it's 20 day MA and the February lows, whereas the SPY and IWM both rebounded at their 20 day MAs, and are at or close to new highs still - and so are still positive.

So a very mixed picture this week.

 

[isatrader]

The medium term NYSE Percentage of Stocks above their 150 day Moving Averages chart added an additional O today, which means it's dropped below 50% of the previous column of Xs, and hence given a P&F High Pole warning. So the status changes from Bull Correction to Bear Alert now for the medium term moving average breadth chart.

 

[isatrader]

S&P 500 Cumulative P&F Breakouts - Breakdowns

There was no new breakouts today and and a further five breakdowns, which has moved the S&P 500 Cumulative P&F Breakouts - Breakdowns line below it's 20 day moving average (which I use as a signal line) for the first time since November. So this breadth measure moves to a sell signal. Attached are the charts.

 

[isatrader]

This thread is moving to a new home on my blog here: Market Breadth Update, so if anyone wants to continue following the weekly updates then you can find them on there.

I will still continue to post updates on here, but they will be less frequent, as it takes a fair bit of time to do each week. So I hope to see you on the new thread, but if not then feel free to continue posting market breadth charts on this thread.

 

[Dentalfloss]

state of the market
video from Jason Levitt
Leavitt Brothers: Blog

 

[isatrader]

Attached is the NYSE long, medium and short term moving average breadth charts and the NYSE Bullish Percent Index.

The short term moving average breadth charts all added to their column of Xs this week, with the Dow Percentage of Stocks above their 50 day moving average chart moving to the extreme 90% level once more, at the end of the week. So 27 of the 30 stocks in the Dow are above their 50 day MA. The S&P 500 Percentage of Stocks above their 50 day moving average chart is also back to it's upper levels with 84% (420) of stocks in the S&P 500 above their 50 day moving averages.

The medium term NYSE Percentage of Stocks above their 150 day moving average remains on Bear Alert status as it failed to reverse from it's column of Os this week. So a cautionary sign still with stocks at such high readings to be aware of.

 

[isatrader]

And here's the rest of the weeks breadth charts...

 

[isatrader]

Attached is the NYSE long, medium and short term moving average breadth charts and the NYSE Bullish Percent Index.

There wasn't any major changes this week with only small moves in each chart, and the medium term NYSE Percentage of Stocks above their 150 day moving average remains on Bear Alert status, as it failed to reverse from it's column of Os again this week. So with all the moving average breath measures in the upper high risk zone for a prolonged period now, caution is necessary imo. As as I've mentioned before, Dorsey's research suggests that the average time for the NYSE Bullish Percent to stay above it's 70% level is 96 days, and hence as it went above 70% at the start of the year, that takes us to early April on the average. So it's definitely time to start considering more defensive strategies at least, and also to start planning how you will react if the market turns lower. But for the time being these measures are still mostly positive overall, but divergences are starting to appear on the line charts with the price action.

To see my custom sector breadth charts go to my blog site at: Market Breadth Update

 

[isatrader]

And here's the rest of the weeks breadth charts...