NYSE Breadth and SPY Momentum Improve

The indicator summary got a few upgrades this week. In particular, we saw an improvement in NYSE breadth. The NYSE AD Line held above its June low and surged over the last two weeks. With this advance, Net New Highs improved and the Cumulative Net New Highs line moved above its 10-day EMA. Momentum also improved as RSI moved above 60 and MACD(5,35,5) turned positive. These positive moves were offset by the Aroon Oscillator, which remains negative.

• AD Lines: Bullish. The Nasdaq AD Line formed another higher low and surged over the last two weeks. The NYSE AD Line held above its June low and bounced over the last two weeks, but remains well below its May-July highs.
• AD Volume Lines: Bullish. The Nasdaq AD Volume Line moved to a new high this month. The NYSE AD Volume Line remains in a long-term uptrend with a new high in July and now a higher low in late August.
• Net New Highs: Bullish. The cumulative Net New Highs line for the Nasdaq has been above its 10-day EMA the entire year. NYSE Net New Highs moved back above 2% and the Net New Highs Line moved above is 10-day EMA.
• Bullish Percent Indices: Bullish. All nine sector Bullish Percent Indices are above 50%.
• VIX/VXN: Bullish. The S&P 500 Volatility Index ($VIX) and the Nasdaq 100 Volatility Index ($VXN) fell back this month and have been largely range bound the entire year.
• Trend-Structure: Bullish. QQQ and QQEW hit new highs this week. IWM is close to its August high, while SPY, DIA and MDY remain shy of their August highs.
• SPY Momentum: Neutral. RSI moved back above 60 and MACD(5,35,5) turned positive. The Aroon Oscillator, however, remains at -50 and bearish.
• Offensive Sector Performance: Bullish. All four offensive sectors are outperforming on a one month timeframe. Three of the four are outperforming on a three month timeframe. XLK is lagging SPY over the last three months.
• Nasdaq Performance: Bullish. The $COMPQ:$NYA ratio broke out in early May, hit a new high in late August and remains in an uptrend as the Nasdaq outperforms the NY Composite.
• Small-cap Performance: Bullish. The $RUT:$OEX ratio broke out in early May and hit another new high this month. Small-caps are outperforming 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.