Trend: The trend in US indices remains strong, following through on the strength that began last week. None of the indices or any of the 9 SPX sectors closed below even their 5-dma. This will be the first warning that weakness is afoot.
Friday, December 27, 2013
Weekly Market Summary
A short holiday update.
Trend: The trend in US indices remains strong, following through on the strength that began last week. None of the indices or any of the 9 SPX sectors closed below even their 5-dma. This will be the first warning that weakness is afoot.
Trend: The trend in US indices remains strong, following through on the strength that began last week. None of the indices or any of the 9 SPX sectors closed below even their 5-dma. This will be the first warning that weakness is afoot.
Friday, December 20, 2013
Weekly Market Summary
US markets end the week back in an uptrend, led, interestingly, by SPX and the Dow, with NDX and RUT lagging. A majority of sectors regained their rising 20-dma (short term) and 50-dma (long term) trend.
SPX is back above a rising 13-ema (yellow circles). With this week's new high, it fulfills the pattern we described two weeks ago - that 8 week streaks of higher closes do not end an uptrend, a higher closing high is high odds (post).
SPX is back above a rising 13-ema (yellow circles). With this week's new high, it fulfills the pattern we described two weeks ago - that 8 week streaks of higher closes do not end an uptrend, a higher closing high is high odds (post).
Tuesday, December 17, 2013
A Breadth Warning From NYSI and NYMO
2013 is the year breadth divergences appeared to be irrelevant. There have been seven major distribution days (90% down volume) and only one major accumulation day. The summation index declined from January until May without much impact on equities. And since May, the percentage of SPX stocks trading over their 200-dma has been in decline.
Today comes a new warning from the McClellan oscillators, NYSI and NYMO. NYMO measures the momentum in breadth and NYSI sums those values daily. A string of negative NYMO readings therefore causes NYSI to go negative. For more details, read here.
Aside from a few days, NYMO has been negative since October. As a result, Summation went negative at today's close.
Since 2000, NYSI (bottom panel) has been negative 20 separate times (yellow shading). Every time it has done so, SPX has not formed a durable bottom until NYMO (middle panel) has capitulated, meaning it closes at minus 75 or lower. The lowest close in NYMO so far has been minus 53. Today, it closed at minus 18.
Today comes a new warning from the McClellan oscillators, NYSI and NYMO. NYMO measures the momentum in breadth and NYSI sums those values daily. A string of negative NYMO readings therefore causes NYSI to go negative. For more details, read here.
Aside from a few days, NYMO has been negative since October. As a result, Summation went negative at today's close.
Since 2000, NYSI (bottom panel) has been negative 20 separate times (yellow shading). Every time it has done so, SPX has not formed a durable bottom until NYMO (middle panel) has capitulated, meaning it closes at minus 75 or lower. The lowest close in NYMO so far has been minus 53. Today, it closed at minus 18.
Monday, December 16, 2013
Fund Managers' Current Asset Allocation - December
Every month, we review the latest BAML survey of global fund managers. Among the various ways of measuring investor sentiment, this is one of the better ones as the results reflect how managers are positioned in various asset classes. These managers oversee a combined $700b in assets.
Overall, fund managers remain very bullish on risk. In September, exposure to global equities was the second highest since the survey began in 2001; it is only marginally lower now. What is particularly remarkable is how long managers have been highly overweight equities (virtually all of 2013). This is longer than any period during the 2003-07 bull market.
Overall, fund managers remain very bullish on risk. In September, exposure to global equities was the second highest since the survey began in 2001; it is only marginally lower now. What is particularly remarkable is how long managers have been highly overweight equities (virtually all of 2013). This is longer than any period during the 2003-07 bull market.
Saturday, December 14, 2013
Weekly Market Summary
SPX has now gone 82 weeks without a 3-week losing streak. This is the second longest in the past 40 years. It's a relevant milestone, as SPX has now closed lower two weeks in a row. Will the streak end this coming week?
This week, SPY crossed above and then back below it's 13-ema (circles). This has been a pattern in 2013 (discussed last week) and it played out again this week. It came in conjunction with a second spike in the Vix Wednesday. The short term trend in SPY is down until the slope of the 13-ema reverses.
This week, SPY crossed above and then back below it's 13-ema (circles). This has been a pattern in 2013 (discussed last week) and it played out again this week. It came in conjunction with a second spike in the Vix Wednesday. The short term trend in SPY is down until the slope of the 13-ema reverses.
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