WEBINAR CHARTS -- RISK ON OR RISK OFF? -- PUTTING A 5% DECLINE INTO PERSPECTIVE -- HIGH-LOW PERCENT INDICATORS REMAIN BULLISH -- HIGH-LOW PERCENT FOR XLI TURNS BEARISH -- SHORT-TERM BREADTH REMAINS BEARISH -- GOLD, OIL, DOLLAR AND BONDS
WEBINAR CHARTS... The charts below are from Tuesday's Webinar and include some basic commentary. See the webinar recording for more details. I also covered eleven stocks (AAPL, ORCL, CSCO, BAC, UTX, EOG, CIEN, JSDU, UPS, CHRW, JBHT). There was a demo showing the different ways to measure relative performance. This section focused on the SCTRs, the RRG indicator, the price relative and some basic chart reading. Click here for video
RISK ON OR RISK OFF?... The risk-on risk-off indicators still favor risk-on for US stocks. The High-Yield Bond ETF (HYG) is underperforming the Investment Grade Bond ETF (LQD) and shows a clear risk aversion in the bond market, but the other four show risk on. Chart 2 shows the S&P 500 outperforming the 10-yr Treasury Note for over two years. Chart 3 shows short-term yields rising. Chart 4 shows the S&P Consumer Discretionary Sector ($SPCC) outperforming the S&P Consumer Staples Sector ($SPST) since mid October. The $SPCC:$SPST ratio, however, looking a little shaky and a break down would be negative. Chart 5 shows the S&P 500 Equal-Weight Index ($SPXEW) outperforming the S&P 500 using the price relative ($SPXEW:$SPX). This ratio is positive for stocks as long as the Nov-Dec lows on hold.
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Chart 1
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Chart 2
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Chart 3
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Chart 4
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Chart 5
PUTTING A 5% DECLINE INTO PERSPECTIVE... Last week's decline was certainly sharp, but it does not look out of place on this three year weekly chart. The pink line shows the zigzag indicator to highlight price moves that are 4% or more. There have been over 10 such declines during this uptrend.
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Chart 6
HIGH-LOW PERCENT INDICATORS REMAIN BULLISH... Chart 7 shows the S&P 500 SPDR (SPY) hitting its first support zone in the 198-200 area. High-Low Percent has yet to move below -5% to trigger a bearish signal. Chart 8 shows the S&P MidCap SPDR (MDY) breaking short-term support near 260 and retracing 38% of the prior advance. High-Low Percent has yet to break below -5%. Chart 9 shows the S&P SmallCap iShares (IJR) failing at resistance and breaking support. High-Low Percent is negative, but has yet to break below -5%.
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Chart 7
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Chart 8
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Chart 9
HIGH-LOW PERCENT FOR XLI TURNS BEARISH... The next four charts shows the sector SPDR, High-Low Percent for the sector and the sector AD Line. XLY is holding up the best.
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Chart 10
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Chart 11
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Chart 12
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Chart 13
SHORT-TERM BREADTH REMAINS BEARISH... Even though the long-term trend is up for the major index ETFs, the short-term trend is down and short-term breadth remains negative. Chart 14 shows the percentage of stocks above the 20-day EMA for the S&P 500, S&P MidCap 400 and S&P Small-Cap 600. A break above 60% is short-term bullish and this bullish signal remains until a break below 40%, which is then deemed bearish. All three broke below 40% to turn bearish this week and remain so until a break above 60%.
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Chart 14
Chart 15 shows the percentage of stocks above the 20-day EMA for the Consumer Discretionary SPDR (XLY), Technology SPDR (XLK), Finance SPDR (XLF) and Industrials SPDR (XLI). The bull-bear thresholds are wider because sectors are more homogeneous than broad market indices. A break above 70% is bullish and a break below 30% is bearish. Three of the four are in bear mode for the short-term. XLY is the only one still in bull mode and the strongest of the four.
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Chart 15
GOLD, OIL, DOLLAR AND BONDS... Gold is forming a bear flag on the weekly chart. Oil remains in a free fall. The Euro is firming in a long-term support zone with a bullish engulfing last week. The 10-YR Treasury Yield ($TNX) remains in a clear downtrend, which means the 7-10 YR T-Bond ETF (IEF) is in an uptrend.
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Chart 16
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Chart 17
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Chart 18
