Posts tagged as Breadth

Friday Color - Bond Flow (!), Recession Risk, Breadth Thrust, Gold Options, Stock Screen

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A Tale Of 2 Sectors

A tale of two sectorsMost utility stocks have been rising over the past 3 weeks and are trading above their 50-day averages. Few energy stocks can boast the same.When there has been this wide of a divergence between those two sectors, the broader market had a strong tendency to rise with only ...

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Advance/Decline Line At New High

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Utility vs Energy Stocks In Uptrends

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Wednesday Color - Reverval, Outflows, Overseas Surges, Copper

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Defensive Stocks Dominate The New High List - Does It Matter?

A defensive new high listAcross the equity market, securities at a 52-week high have expanded. Same goes for companies within the S&P 500. And within that index, it’s been more of the defensive sectors that have seen the best participation.While that suggests a potentially worrisome risk-off ...

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Small Traders Buy Record Hedges Even As Financials Surge

Financial recoveryFor the first time since early 2018, more than a quarter of financial stocks within the S&P 500 hit a 52-week high.This kind of a surge has been good for the sector, with gains over the next year every time.In 2000, this jump in new highs among financial stocks led to a 4% ...

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Tuesday Color - Gaps Up, Bond Flow, Weird Volatility, Sector Highs

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Monday Color - New Highs, Material Gain, Financials, Gold, Small Traders, 5 Straight

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A Big Jobs Miss As Highs Surge

JobsWe saw on Thursday that a big miss in the ADP report possibly meant a big miss in the Nonfarm Payroll report today, and if it dove to a 5-year low, would be a bad sign for stocks. The report missed, but wasn't bad enough to trigger the 5-year low. So at least there's that.But the report did ...

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Friday Color - Jobs, Econ Surprises, 4 Gains, Breadth, Energy, Gold

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Thursday Color - Bond Moves, Yield Curve, Jobs, REITs & Utes, New Highs, Mexico

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Buyers' 1-2 Punch For Stocks

A one-two rallyThe S&P 500 fell to a 50-day low on Monday, and the charts didn’t look good, but they hid a lot of underlying potential. Both Monday and Tuesday saw eager buying pressure under the surface, and Tuesday’s one-day jump in the S&P was the largest in nearly six months.When the index ...

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Buying Thrust Off A Low

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Wednesday Color - Gaps, Tuesday's Jump, Breadth Recovery, Bitcoin, Corn

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Tuesday Color - Bond Volatility And Optimism, Gold, Flows, Tech Breadth

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Monday Color - Cycle Peak, De-Risking, Silver, Breadth Extremes

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Why This Has Been A Healthy Pullback

From new high to downtrendBarely a month after it was sitting at an all-time high, the S&P 500 fell far enough and fast enough to close below its 200-day average.This is one of the index’s quicker turnarounds from being at a multi-year high to falling below its average. When it had spent at ...

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Friday Color - More Gaps, Peso, Outflows, Bond Binge

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Wednesday Color - Gaps, Confidence, Staples, May Loss, Options Fear

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Tuesday Midday Color - Shanghai, , DAX, Bond Bulls, Euro Sentiment

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Friday Midday Color - Dow's 5th Loss, Energy Breadth, Utes, Social Negatives

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Thursday Midday Color - Panic, Few Bulls, Asian Slide

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This Has Happened To Tech Only Twice Before

From first to worstStocks have lost one of their biggest drivers. Tech stocks have powered much of the rally through April, and then fell hard. The sector was leading the S&P 500’s 11 major sectors, and then fell to the worst among them over the past few weeks.That does not happen often, and ...

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Tuesday Midday Color - Shorts, Emerging Mkts, Sector Extremes

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Friday Midday Color - Bonds, Renewed Momo, Overseas Extremes

Here's what's piquing my interest as traders try to end the week on an up note.PanickyThe pre-market nerves are continuing. We've touched on this a few times this week, and traders continue to push futures down before the open of regular trading hours. Over the past 10 days, the average gap in ... [...]

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Traders Are Panicking The Most Since The Financial Crisis

More momentum miscuesSigns of waning momentum are everywhere. One of the more impressive signs of intense underlying buying was in the Dow Industrials, where the McClellan Summation Index held above 1,000 for nearly three months, until now.Other times that extreme momentum finally ended over the ... [...]

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Wednesday Midday Color - Big Outflows, More Hedging, Falling Momo

Here's what's piquing my interest so far today.FlowsOn Tuesday, there were outflows among a large number and variety of equity funds. A bunch of them lost more than $25 million in assets on the day, led by the two most popular.That continues a trend for both SPY and QQQ. Across all of the major ... [...]

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Momentum Traders' First Real Test

Testing momentumIn early January, stocks registered a Zweig Breath Thrust when Up Volume quickly swung from oversold to overbought. This week, the indicator hit an oversold level for the first time, testing momentum traders’ conviction.Other times that months passed between a thrust and the ... [...]

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Tuesday Midday Color - More Gaps, Breadth (Down) Thrusts, Overseas Drops

Here's what's piquing my interest so far today. It's not midday, but I prefer to get these out early if there are large gaps.ReliefStocks are on track to rebound strongly following Monday's bad loss. The futures are looking to gap up at least 0.5%, following a day when they gapped down more than ... [...]

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Sentiment Is Curling

Summation finally weakensWe’ve discussed the McClellan Oscillator and Summation Indexes a lot in recent months, because they have been showing notable readings of momentum. That’s starting to ease with the long-term Summation Index, which dropped below 750 for the first time in months, ending ... [...]

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Friday Midday Color - Pre-Market Fear, Failures, Overseas Extremes, Momentum Drops

Here's what's piquing my interest so far on this edgy Friday.Pre-Market FearThe uncertainty surrounding the trade posturing has triggered quite a bit of nervousness ahead of regular trading hours. By 8:30am EST, futures have shown relatively large losses each of the past six days. During the ... [...]

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Thursday Midday Color - First Pullback, Weak Sectors, Returning Investors

Here's what's piquing my interest so far on this whippy day.Finally, A 3%-erThe S&P 500 is on track to pull back by more than 3% from the highest point it rallied to since the December bottom. That's the first time it's pulled back by this "large" of an amount. That streak of more than 90 days ... [...]

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Wednesday Midday Color - Vol Surge, Dow Drops, Sector Extremes

Here's what's piquing my interest so far on this meandering day.Vol SurgeThere are no shortage of measures which capture the big move on Tuesday. Perhaps because of the headline-driven nature of the decline, historical comparisons are less appropriate, but that seems to be the case ever time. ... [...]

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4 Energetic Extremes

Energy extremesThe selling pressure earlier this week in the energy sector triggered several shorter-term extremes in breadth. Most of those stocks fell to their lowest in a month, below their volatility bands. Few held above their short-term moving averages.When the sector had rebounded more ... [...]

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Friday Midday Color - Momentum Market, Energy Washout, Russell Breakout

Here's what's piquing my interest on yet another positive Friday. This marks the S&P's 14th rally out of 16 Fridays since the beginning of the year.Momentum MarketHere's a question I got the other day, reflecting some version that's been asked several times essentially asking the same thing:So ... [...]

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Why Beans Should Bounce

No oomph in OscillatorThe McClellan Oscillator hasn’t been able to get above zero even as the S&P 500 and other indexes tick to new highs on multiple days.Over the past 57 years, this has been a negative sign of underlying weakness for stocks, though the sample is small, and the most recent ... [...]

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Wednesday Midday Color - Sagging Summation, Missing MoMo, Strategist Switch

Here's what's piquing my interest as traders await the latest guidance from the Fed.Breadth ReviewUtilities have picked up again. Most of the breadth measures are meandering around neutral or slightly stretch. The big move yesterday, though, pushed nearly 60% of those stocks outside of their ... [...]

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A Shocking Volatility Twist With Recovering Financials

Volatility twistOver the past month, volatility in big tech stocks has been lower than volatility in stocks specifically chosen because of their staid nature, according to Bloomberg data. Historical volatility on the Nasdaq 100 fell below that of the S&P 500 Low Volatility Index, a rare twist ... [...]

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Tuesday Midday Color - No Cash, Bullish On Bonds, Financials' Breadth

Here's what's piquing my interest so far on this month-end, yet-another-buy-on-weakness day.No CashThe latest data from the Investment Company Institute shows that mutual fund managers reduced their cash positions again in March. They're now holding 2.9% of client assets in liquid instruments, ... [...]

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Monday Midday Color - Cranky Calls, Big Breadth, Can't-Miss Swiss

Here's what's piquing my interest so far today.Kanye Wouldn't Be HappyThe WSJ, via BofAML, notes that companies aren't mentioning positive keywords much on their earnings calls. They searched through call transcripts over the past 16 years and show that there have been few mentions of ... [...]

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Breadth Breathes As A Bearish Candle Engulfs Oil

Breadth takes a breatherIn January, breadth momentum was so impressive that the McClellan Oscillator held above 50 for over a month. Since then, it hasn’t climbed above that level even as stocks made great gains.This is a divergence that has triggered near several important market peaks, but the ... [...]

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Friday Midday Color - Flows, Breadth Extremes, Shanghai

Here's what's piquing my interest so far on this Friday.Argentinian AngstThe WSJ notes that consumer confidence in Argentina has taken another hit due to political instability. I know next to nothing about the country, but it's at least worth noting that over the past 6 months, consumer ... [...]

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Thursday Midday Color - Dollar Bets, Big Breadth, Twitter Junk

Here's what's piquing my interest so far today.Dollar BetsYesterday's report noted the multi-year breakout in the dollar, which has had a tendency to pull back most of the time over the next 2-6 months. The long-term trend has been about flat, so breakouts have had a tendency to be unsustainable ... [...]

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Stocks Have A Participation Problem

Debt declinesWhen stocks rally, investors tend to borrow more against their shares. There is a high positive correlation between changes in stock indexes and changes in margin debt.That’s breaking down this year, though. As stocks have rallied, investors have held back on their debt. It’s not as ... [...]

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Wednesday Midday Color - Bond Bulls, High-Yield Breadth, Lagging S&P Stocks, Tech Values

Here's what's piquing my interest so far today.Bond BullsThe rush into long-term Treasury ETFs has been really something. Four of the largest funds have increased their shares outstanding by more than 15% in just the past week. The last couple of times, that coincided with short-term exhaustion ... [...]

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A Most Excellent Recovery

An excellent recoveryThe S&P 500’s new high marks an end to the correction, one of the S&P’s most impressive recoveries from a major decline from a prior all-time high. Other times it made a somewhat similarly-sized recovery over a quick- to moderate time frame, it tended to keep going, but it ... [...]

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Tuesday Midday Color - S&P Recovery, Pound Probabilities, Mixed Breadth

Here's what's piquing my interest so far on a curiously strong day.RecoveryIn spite of overwhelmingly optimistic sentiment in some models, buyers continue to persist. For months, the most positive thing about stocks was the price activity (and breadth from December through February), and that ... [...]

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4 Reasons Why Health Care Could Rebound

Health care’s bad weekHealth care stocks have gotten hit, and it’s erased their year-to-date gain, while the S&P 500 has held up. The divergence between the two this far into a year is unusual.Other times health care underperformed by more than 5% through this many sessions into a year, it led ... [...]

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Thursday Midday Color - Health Care, Opex

Here's what's piquing my interest so far on this pre-holiday Mueller-fest.DamagedThe carnage in health care stocks over the past few days has generated some interesting readings in the breadth metrics. The move was swift and severe enough that more than 60% of stocks in the sector closed below ... [...]

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Wednesday Midday Color - Tech Breakout & Breadth, Screens

Here's what's piquing my interest so far on yet another potential reversal day.BreakoutEven if the rally in tech fades, on an intraday basis the Nasdaq 100 has bested its prior multi-year high by at least 0.5%. The most bullish aspects about this market aren't fundamental, and they're certainly ... [...]

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Tuesday Midday Color

Here's what's piquing my interest so far today.Super ConfidentDumb Money Confidence has entered a "super extreme" phase. In the 20 year history of the model, only two distinct time periods can compare - the recoveries from the last two major bear markets. That was a good long-term sign of ... [...]

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Does The Low Volume Really Matter?

Low-volume rallyEach of the past three weeks has seen the S&P 500 inch ever closer to a new high. At the same time, investors have grown increasingly comfortable, as volume continues to decline and is now more than 10% below its yearly average.It’s entirely normal for volume to ratchet higher ... [...]

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Monday Midday Color

Here's what's piquing my interest so far on tax day.April 15Just because.Breadth ReviewThere was another surge in French stocks hitting multi-month highs to end last week, at nearly 50% of CAC components.That has helped to push its long-term breadth momentum to an extreme.In the U.S., the ... [...]

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No Spike In New Highs - What It Means

A sparse new high listThe S&P 500 has been hanging near its former high, but relatively few securities on the NYSE have been able to push above their former peaks. It’s now been 300 days since more than 7% of issues on the NYSE hit a new high, ranking as one of the longest stretches in 50 years. ... [...]

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Thursday Midday Color

Here's what's piquing my interest so far on this potential bearish-engulfing day.Emerging EmergingPretty much every study we've looked at for emerging markets since last fall has been bullish, and those markets continue to plug along. The MSCI Emerging Markets Index has now rallied for its 10th ... [...]

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Wednesday Midday Color

Here's what's piquing my interest so far on this waiting-for-the-Fed day.Mexican MomentumIn Friday's report, we saw that "The MSCI Mexico Index closed above its 200-days for the first time in six months on Friday. Other times it went this long before ending a downtrend, it added to gains over ... [...]

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Tuesday Midday Color

Here's what's piquing my interest so far on yet another day with buyers stepping in on the smallest downtick.RecoveryAmong the major S&P 500 sectors, the first to entirely erase its decline was information technology, scoring its first new all-time high since last fall. That is a quick ... [...]

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Friday Midday Color

Here's what's piquing my interest so far today.Nice RunBulls have been pushing things, with a long streak of up days and new 100-day highs. For the past 7 sessions, the S&P 500 fund, SPY, has gapped up at the open. We haven't seen that kind of pre-market enthusiasm since January 2018.It's ... [...]

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Thursday Midday Color

Here's what's piquing my interest so far today.Crude RecoveryThe WSJ notes that crude oil has finally managed to recover above its 200-day average after a long period below. At its depths, it was more than 30% below its average, a truly severe decline.When it has closed above its average after ... [...]

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Tuesday Midday Color

Here's what's piquing my interest so far today.Breadth ReviewThe jump on Monday triggered a number of new extremes. Every material stock rose above their 10-day moving averages, which we don't see too often. If we add some context and look for times it triggered when XLB rose above a declining ... [...]

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Thursday Midday Color

Here's what's piquing my interest so far on this fading rally day.Breadth ReviewThere was a spike in the number of stocks on the Brazilian Ibovespa exchange falling below their lower Bollinger Bands. This happens when stocks are trading in a relatively narrow range then suddenly ... [...]

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Options Traders Bet On Decline As S&P Meets Target And Utes Surge

Options bets and strategists’ spreadAs stocks rally, options traders have built up a large position in S&P 500 put options, relative to the number of outstanding calls. It’s the opposite in VIX options, where they have few puts and many calls. Since 2006, this has led to a negative annualized ... [...]

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Surge In New Highs Among Utilities

For such a normally staid sector, a lot of utilities have been putting in impressive performances. It has been enough that more than 80% of them recently hit a 52-week high at the same time. That’s among the best readings in nearly 30 years.Across all time frames, utilities struggled to gain any ... [...]

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Wednesday Midday Color

Here's what's piquing my interest so far on this recovery day.Breadth MovesA somewhat swift dip in Swiss stocks moved the McClellan Oscillator below -90 for the SMI. Since that market's major low in 2011, readings like this in an uptrend have had a strong tendency to rebound. A caveat is that ... [...]

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Tuesday Midday Color

Here's what's piquing my interest so far on this recovery day.Waning ConfidenceToday's release of the Conference Board's latest readings on consumer confidence revealed that attitudes about present conditions are at the lowest point in nearly a year. This is coming on the heels of what had been ... [...]

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Monday Midday Color

Here's what's piquing my interest so far today. Confident TradersThe weekly summary of options trading across all U.S. exchanges shows that the smallest of traders are still buying calls to open at a pretty aggressive clip. They spent 39% of their total volume on purchasing speculative call ... [...]

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Thursday Midday Color

Here's what's piquing my interest so far today.FOMC ReversalStocks are trying to fully reverse any weakness from earlier this week. If SPY closes at a new high for this move, it would be the first time traders pushed it to at least a 100-day high the day following a FOMC meeting since 2014. ... [...]

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Tuesday Midday Color

Here's what's piquing my interest so far today.CautiousAccording to the latest monthly BofA fund manager survey, big money managers are still not showing any optimism toward equities as a general asset class, with only a 3% overweight. It has been declining consistently for the past 2 years and ... [...]

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Breadth Momentum Crests As FX Volatility Plunges

Breadth surge has crestedAfter seeing a historic run in the momentum of stocks’ underlying breadth in January and February, indicators are showing diverging trends. That’s to be expected after readings like January’s, and historically these “negative divergences” haven’t been so negative. Over ... [...]

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Monday Midday Color

Here's what's piquing my interest so far on this rally-fading day.ExpirationI think we've been looking at this tendency for more than 15 years now, and surely others were before that. After one of the quadruple witching days, especially in March, stocks have struggled for the next week. Not sure ... [...]

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Catching Up

I'm taking some time for spring break with our kids, but here are some things that are piquing my interest right now.Nothing has really changed the past few days. We're still seeing mostly mixed equities with the rebound so far today, and a relatively poor risk/reward profile over the ... [...]

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Hedgers Are Hedging As Transports Lag Amid Momentum Ebb

Hedgers actually hedgingHedgers in the major index futures pared their positions by more than $10 billion at the end of February. That’s one of their larger one-week increases in hedging activity.When they’ve made such big changes in the past, it has been a bit of a negative for stocks.Dow ... [...]

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Tuesday Midday Color

Here's what's piquing my interest so far on this mixed day.China ShinesChinese stocks continue their march upward, which bodes well for the longer-term. We saw in previous reports how a 20% rise from a low in the Shanghai Composite had led to more long-term gains when buyers continued to press ... [...]

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Monday Midday Color

Here's what's piquing my interest so far today.ReversalPretty nasty-looking outside reversal in indexes and funds like SPY today. But...be careful. These have a terrible habit of not working like chartists insist they should. Following is every time SPY gapped up above the highest close in the ... [...]

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Mystery Buyers As Breadth Momentum Hits Epic Proportions

Mystery buyerThere are many remarkable aspects to the rally over the past two months, including who’s buying. Large speculators in index futures continue to sell. So do small speculators.Hedge funds don’t seem to be buying. And neither do mutual fund or ETF investors. All of these are a change ... [...]

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Friday Midday Color

Here's what's piquing my interest so far today.MomentumThe level of breadth momentum across markets, index, and sectors is staggering. It has been so forceful and sustained that the McClellan Summation Indexes for several sectors are nearing multi-decade or all-time extremes. While often a good ... [...]

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Thursday Midday Color

Here's what's piquing my interest so far today.SlickThe WSJ notes that it's not only stocks enjoying a good start to the year. For oil, it's the best-ever, unless it takes a massive hit today. With a gain through yesterday of more than 25%, it's by far the best YTD return through February since ... [...]

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Big Rally In Small Stocks, With Smart Money Buying

Small stocks, big rallySmall-cap stocks have rallied 24% in only two months, ranking among the best rallies since 1926.Other times they jumped to this degree, small stocks tended to rise in the months ahead, but there were some failures. The overall bias was positive, especially in terms of risk ... [...]

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An Industrial-Led Rally As Shanghai Surprises

The rally’s workhorsesThe Industrials sector has led all major S&P 500 groups since the December 24 low, while defensive ones like Utilities have lagged.Going back to 1928 and looking at all two-month, 10% rallies from a low, we see that the rallies with the highest sector correlation to our ... [...]

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Tuesday Midday Color

Here's what's piquing my interest so far today.China SurgeYesterday, we looked at a couple of different metrics related to the move in Chinese stocks. With more data becoming available, its importance starts to stand out a little more.Within the approximately 1500 stocks in the Shanghai ... [...]

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No Volatility As Utilities' Breadth Impresses

No volatilityVolatility expectations across assets have plunged. The VIX and its related measures for stocks, bonds, oil, gold, and bonds is hovering near multi-year or even multi-decade lows.Since 1990, it has been unusual to see the “volatility of everything” collapse at the same time, and it ... [...]

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Monday Midday Color

Here's what's piquing my interest so far today.As noted by Bloomberg, volume in Chinese A-shares spiked on the President Trump's optimistic trade tweets. Unlike most other markets, volume in Chinese shares tends to spike on rallies, not declines. Today's volume was 8 standard deviations above ... [...]

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Friday Midday Color

Here's what's piquing my interest so far today.Looking through long-term breadth momentum for sectors and indexes, it's remarkable how many are showing a McClellan Summation Index above 1,000.If we use the Backtest Engine, we can see that these extremes are getting to the point that typically ... [...]

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Thursday Midday Color

Here's what's piquing my interest so far today.The VIX closed under 15 for the first time in months on Wednesday. That has rarely led to further losses over the next several weeks.Ignore the latest date on the tables, it should read “2019-02-15”. The rising volatility didn’t necessarily ... [...]

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A Remarkable Run, As Bulls Return And Dow Stocks Are Above Average

A remarkable runBoth the S&P 500 and Russell 2000 have enjoyed a near-historic run from their Christmas Eve lows. The magnitude of their gains, interrupted by only a few large daily losses, have been matched only a few times.The sample sizes are tiny, but the implications are mostly positive, ... [...]

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Wednesday Midday Color

Here's what's piquing my interest so far today.Gold continues to rally. GLD just put in its best day in over a month while closing at a 9-month high. Lately, that's led to some backing-and-filling over the next couple of sessions, especially in recent years.Not working in gold's favor is ... [...]

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Crossing A Flat 200-Day Average As Optimism Follows The Thrust

Jumping over a flat averageThe S&P 500 finally closed above its 200-day average after a couple of months below. Because the decline was not that severe or long-lasting, the average was flat.When the S&P has ended a streak below its 200-day average and that average was flat, its returns were ... [...]

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Sustained Momentum Even As Cumulative Net New Highs Barely Budge

Sustained momentumThe McClellan Summation Index continues to power higher, showing impressive and sustained momentum. After being below -500 for at least 10 consecutive days, it is now above +500 for 10 straight, flipping its momentum.When it has been able to maintain a high level after flipping ... [...]

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Cumulative New High / New Low Lagging

One of the most popular ways to view the breadth of a market is by watching the Cumulative Advance/Decline Line. And the most popular among the various versions is the one tracking all NYSE securities, or the one using common stocks only. A much lesser-known version of the Cumulative Line uses ... [...]

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Fear Is Slipping As Moving Averages Show Extreme

Fear is slippingEven while the S&P 500 remains below its 200-day average, the VIX has slipped to a multi-month low and is well below its long-term average of 20.This has consistently led to trouble over the short- to medium-term as the ebbing of concern showed that investors were too quick to ... [...]

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Good Overbought; Dow Leads Above 200-Day

Good overboughtAfter reaching an extreme oversold reading in December, the long-term McClellan Summation Index has cycled back to an overbought reading. What’s notable about this is just how quickly the Summation Index has cycled up to 500 after being so depressed just a month ago. The only time ... [...]

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McClellan Summation Crosses 500

With the surge in many breadth-related indicators that we've looked at in reports over the past few weeks, it's no surprise that the long-term McClellan Summation Index has finally made it to its upper threshold level of +500. The originators of the McClellan indexes, especially their son Tom, ... [...]

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Emerging Markets Breakout; Fidelity Managers Beat Cash; Baltic Dry Collapse

This is an abridged version of our Daily Report.Breaking outEmerging markets have closed above their 200-day average for the first time since last spring, a streak of nearly 9 months. That’s one of the longer streaks in 30 years.Other times an emerging markets index ended long streaks below its ... [...]

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Back To Greed; Low Exposure; Oscillator Streak

This is an abridged version of our Daily Report.Back to greedThe CNN Fear & Greed model has gone from extreme Fear in December to Greed now.It’s not unusual to see it swing this much, this quickly, but it is unusual when the S&P 500 still hasn’t made it above its 200-day averages. And those ... [...]

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McClellan Oscillator Above 50 For 3 Weeks

After dipping close to 50 earlier this week, an improvement in breadth to end the week pushed the McClellan Oscillator higher once again. It has now spent three straight weeks (15 consecutive trading days) above its overbought level of 50.It has been 27 years since it went this long above 50. We ... [...]

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Most Stocks Are Rallying; Put Open Interest Is Rising

This is an abridged version of our Daily Report.Stocks are rallyingEven though the S&P 500 is nearly 10% below its high, its Cumulative Advance/Decline Line has rebounded so much it’s almost at a new high.That’s a positive divergence, but historically there hasn’t been much positive about it, ... [...]

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The Anti-Hindenburg Omen; Fed Recession Risk Rises

This is an abridged version of our Daily Report.The anti-HindenburgA compelling reason for caution last fall was the kind of split market that triggered a cluster of Hindenburg Omen warning signs. Over the past two weeks, there has been a cluster of signals that are the exact opposite of the ... [...]

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No Bank Failures; Battle Of Time Frames For Moving Averages

This is an abridged version of our Daily Report.As good as it can getLast year, there were no bank failures. That sounds like a good thing, and it’s happened only 3 other times in 85 years. A sample size of 3 makes it difficult to consider the precedents, so if we relax the parameters and look ... [...]

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New Low Decline As An "All-Clear"; Junk Bond Surge

This is an abridged version of our Daily Report.All is not clearIn December, more than 40% of securities hit a 52-week low. That has since collapsed to fewer than 0.4% of issues, the 2nd fastest and most dramatic reversal in history.If we relax the thresholds, using more than 30% new lows as the ... [...]

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Zweig Breadth Thrust; Strategists vs Analysts

This is an abridged version of our Daily Report.TriggeredThis time is different. When we look at the declines and attempted recoveries since the trouble started in October, what has transpired since mid- to late December is markedly different than the ones that failed. This push off the lows has ... [...]

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Breadth Thrust From The Low; Record Stock And Bond Fund Outflows

This is an abridged version of our Daily Report.Get me inDuring rally attempts in November and December, one worry was that there were no strong thrusts in breadth. Both failed. During this latest rally, there have been two such days, so strong that there are few historical precedents.Maybe it’s ... [...]

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Newsletters Are Shorting; Breadth Swings; No Highs; Big Outflow; Buying Stampede

This is an abridged version of our Daily Report.Get shortyWhile individual investors in the AAII survey became pessimistic a week ago, this week there were more than 50% bears in the survey for the first time in 5 years. That has made a different in other surveys, too. According to one measure ... [...]

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Swift, Severe Decline; Up Volume Thrust; Low TRIN

This is an abridged version of our Daily Report.Stocks just suffered one of the largest, swiftest pullbacks in 70 yearsThe S&P suffered a 17% loss in less than four months.That’s unnerving but is not the kind of decline that happens before or during economic recessions. They are mostly ... [...]

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A Pre-Holiday Review

The release of some of the weekly data we follow has confirmed just how extreme last week’s activity moved sentiment. I will be travelling for the holiday, so no end-of-day report will be published.One of the most reliable gauges we have is showing an extreme like we’ve rarely seen. When we ... [...]

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Another Volatile Session

This is an abridged version of our Daily Report.Another volatile sessionSome early optimism on Thursday was quickly erased, and stocks dove to new lows for this move. In the process, it triggered several extremes:* The Nasdaq is on the threshold of a 20% decline.* The percentage of securities ... [...]

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New Low Spike; Heavy Selling Cluster

As we head into the close on yet another dreadful day for stocks, along with almost everything else, there are a few things that are worth noting.Most importantly, there is clear evidence of wholesale selling on a level we rarely see. Since 1984, as far back as we can go, there have been only 8 ... [...]

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Equity Risk Premium Collapses; A Day Of Notable Moves; VIX Not Jumping

This is an abridged version of our Daily Report.Equity premium collapsesThe premium that investors are willing to pay for stocks’ earnings has collapsed relative to the yield available on bonds. The one-year z-score of the Equity Risk Premium is now 4 standard deviations below average, a ... [...]

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Oil And Energy Collapse; RSI Divergence; Smart-Dumb Money Extreme; Overwhelming Lows

This is an abridged version of our Daily Report.No energyCrude oil collapsed with a large loss and 52-week low on Tuesday. That’s not what the Energy stock sector needed right now but taking the chance that we’re whistling past the graveyard, the losses on Monday and Tuesday may just be bad ... [...]

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Long-Term Bears; Russell 2000 Bear Market; S&P Drops On Friday/Monday; Spike In 52-Week Lows

This is an abridged version of our Daily Report.Long-term bearsBuilding on what we looked at last week, we take a longer-term, multi-year look at prior bear markets, including their median loss and standard deviations. We also look at returns following major peaks in Consumer Confidence.The ... [...]

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Energy Stocks Worst Breadth In 4 Years; Traders Keep Selling The Open

This is an abridged version of our Daily Report.At least Financials are worseBreadth in the S&P 500 Energy Sector is the worst in four years. Few of the stocks are above even their shortest-term moving averages, and there has been a spike in the percentage of stocks at a 52-week low.This has, in ... [...]

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New Lows In Financials; Buy-The-Rally Is Dead, Too

This is an abridged version of our Daily Report.Financial troublesMore than half of the stocks in the S&P 500 Financials sector have declined to a 52-week low, the most in more than two years.After investors have sold so many in a single sector to this low of a level, it has tended to bounce. ... [...]

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Financials' New Lows; Bank Loan Pessimism

Among all the carnage over the past week, Financials have been among the hardest hit. Despite the attempted reversal on Monday, many of the stocks in this sector either didn't participate, didn't fully reverse, or sunk so far during the morning that they still hit their lowest level in at least ... [...]

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Bonds On Sale; Hedge Fund Exposure; Persistent New Lows

This is an abridged version of our Daily Report.Bonds on saleA popular intermediate-term corporate bond ETF was trading this week at a price (relatively) far below its underlying value.Big discounts on liquid ETFs are rare, and often a good contrary indicator. Over its nearly 10-year history, ... [...]

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Volatility Regime Change; More New Lows

This is an abridged version of our Daily Report.Regime changeStocks have swung more than 1.5 standard deviations on more than half the days during the past two months. That’s a big change from September when it happened only once. When stocks change from a low-volatility regime to a high one, it ... [...]

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Yield Curve Inversion; Intense Selling; November Flows

This is an abridged version of our Daily Report.Upside downThe yields on 2- and 3-year Treasuries are now higher than 5-year maturities, an inversion of the short end of the yield curve.This tends to precede an inversion of the more common 2-year vs 10-year yields. But there has been a long lead ... [...]

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Positive Breadth Divergence; Growth Worries

This is an abridged version of our Daily Report.A positive divergenceWhen the S&P fell to a 6-month low last week, significantly fewer of its individual stocks did so, creating a positive divergence in its Advance/Decline Line.That looks pretty on a chart, but it hasn’t been consistent enough, ... [...]

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Sentiment vs Earnings; Massive Buy Programs

This is an abridged version of our Daily Report.Sentiment vs earningsThe S&P 500’s flat return in 2018 so far has been due to the growth in earnings being offset by a drop in sentiment. The price/earnings ratio for the index has declined about as much as earnings have grown, like 2011.Other ... [...]

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Puts Are Popular; No Sector Funds Are Beating Cash

This is an abridged version of our Daily Report.Puts have become popularSince the market peaked in September, most days have seen at least 10% more put options traded than call options, the largest cluster in three years. Out of a total of 27 days in the sample, the S&P was higher two months ... [...]

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An Almost-Thrust; Bond Boondoggle

This is an abridged version of our Daily Report.An almost-thrustAt the end of October, volume was flowing overwhelmingly into declining stocks, pushing the Up Volume Ratio into oversold territory. That has now changed, and the switch has been aggressive enough to (almost) trigger a traditional ... [...]

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No Capitulation; No Breadth Thrust

This is an abridged version of our Daily Report.No capitulationThe VIX “fear gauge” never really spiked during the October pullback, suggesting no capitulation from investors.That’s not really true, and it doesn’t matter for forward returns. History is riddled with bottoms that weren’t ... [...]

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Massive Sell Programs; Hard, Fast Pullback, Near-Record Negative Momentum

This is an abridged version of our Daily Report.Everybody outDuring the past 3 weeks, we’ve seen a near-record amount of sell programs at some point during the trading day.The lowest NYSE TICK during that stretch is now the 2nd most extreme in history, with an average of more than a net 40% of ... [...]

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Stocks, Sectors In Correction; Nasdaq's Bad Day; S&P Negative YTD; Spike In Pessimism

This is an abridged version of our Daily Report.Stocks in correctionThe S&P still hasn’t suffered a correction, if we define it by a 10% decline from a 52-week high. With the severe loss on Wednesday, it has just barely missed the cut. Most of its stocks haven’t been so fortunate, however. With ... [...]

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Major Reversal; Jump In New Lows; Dumb Money Purge

After the big reversal on Tuesday, futures were indicated to gap lower again on Wednesday. In the history of the S&P 500 futures, that had led to rebounds over the next several sessions every time.As it stands now, futures have recovered, which dampens the short-term outlook quite a bit. ... [...]

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Waiting For A Breadth Thrust; Chinese Investors' Long Slog

This is an abridged version of our Daily Report.Waiting for a thrustBreadth recent hit a deep oversold reading, now many are looking for an upside “thrust” that signals a return of buying interest.But waiting for a breath thrust hasn’t worked well in bull markets. Future returns were better, and ... [...]

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Correcting Oversold; Quick Change In Character; Every Dow Stock Rises

This is an abridged version of our Daily Report.Correcting oversoldThe McClellan Oscillator has gone from extremely oversold to neutral. It was below -90 just a few days ago and is now up to -10.Such a rapid change in character has been a good sign during uptrends, and that context was important ... [...]

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Rate-Sensitive Divergence With Yields As New Lows Climb

This is an abridged version of our Daily Report.Rate-sensitive divergence warningAs yields rise, the Financial sector is badly underperforming Utilities, which is atypical.Historically, there has been a strong positive correlation between rates and the ratio of Financials to Utilities. When a ... [...]

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Momentum Shift As Bonds Have Big Move

This is an abridged version of our Daily Report.Momentum shiftThe McClellan Summation Index is below zero for the first time in a half-year.It’s also turning negative while stocks are still relatively close to their recent highs, and that has been more of a negative shorter-term.Bonds’ biggest ... [...]

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NDX Breaks 50-Day, Breadth Momentum Rolls Over

On a quick administrative note, we've now added priority email support for all Premium members (which you are if you're receiving this). Instead of emailing admin, send requests to premium "at" sentimentrader "dot" com and it will automatically go to the top of our priority list.Market-wise, ... [...]

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Dow Ignores Majority, IPO Appetite Wanes

This is an abridged version of our Daily Report.Dow ignores the majorityThe Dow Industrials have rallied to new highs, but most stocks are in bear markets.More than half of NYSE stocks are below their 200-day averages, a rare disparity on days when the Dow has been at its highest level in a year ... [...]

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Options Bulls Reign As New Lows Rise Even Amid Good Price Momentum

This is an abridged version of our Daily Report.Calling all bullsOptions traders are showing a historic preference for speculating on the upside. In recent weeks and months, they’ve spent most of their options volume on buying speculative calls.At the same time, they don’t want to risk a large ... [...]

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Breadth Lacks Oomph As Many S&P Stocks Still In Bear Markets

This is an abridged version of our Daily Report.Lacking a little oomphStock indexes have reached record highs, but there isn’t much oomph in the move. The McClellan Oscillator has been negative for nearly 3 weeks, which is a long time given the run to new highs in the S&P. When the index hits a ... [...]

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Dow Theory Buy Signal Even As Homebuilders Slip

This is an abridged version of our Daily Report.Dow theory buy signalBoth the Dow Industrials and Transports have reached new highs. This is the first new high in the Industrials in months, following the previous breakout from Transports. Similar buy signals according to trend-following theory ... [...]

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Managers Favor U.S. As Market Sees Historic Split

This is an abridged version of our Daily Report.There’s no place like homeFund managers are showing a multi-year preference for U.S. stocks. A popular survey from BAML shows that managers are heavily overweight the U.S. versus both emerging market and eurozone stocks. But that hasn’t necessarily ... [...]

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A "Small" Split As Investors Pull Back

This is an abridged version of our Daily Report.A “small” splitThe Russell 2000 is near its highs, but relatively few of its stocks are trading above their moving averages. There has also been an uptick in its stocks hitting multi-month lows.The only other times this has happened to this degree ... [...]

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Financials Lag As Transports Lead

This is an abridged version of our Daily Report.Stalling Financials trigger concernEven as the S&P tickles a new high, Financials have struggled and are the worst-performing major sector over the past six months. The ratio between Financials to the S&P just hit a new 52-week low, which has been ... [...]

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Growth Better Than Unemployment As Warnings Cluster

This is an abridged version of our Daily Report.Growth > unemploymentThe President’s triumphant gaffe about a 100-year high in economic success masked a relatively common signal. When GDP growth was higher than the unemployment rate, stock returns were in line with random, suggesting there was ... [...]

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Small Business Has Never Been Better As Hong Kong Slides Into A Bear

This is an abridged version of our Daily Report.Never betterSmall business owner optimism is at record highs, surpassing two other periods since 1979.Despite worries about labor, owners have exceptionally high confidence about future conditions. It is backward-looking for stocks, though, and ... [...]

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A Week Of Warnings As Transports Break Out

This is an abridged version of our Daily Report.A week of warningsEvery day last week triggered a Hindenburg Omen or Titanic Syndrome technical warning signal.While they are much-maligned and not immune to failures, similar clusters of these warning signs preceded consistent weakness across ... [...]

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Record Positive Divergence As We Near An August High

This is an abridged version of our Daily Report.A near-record positive divergenceThe S&P 500’s Advance/Decline Line is more than 5% above its high from January, showing that even as the index itself has struggled to hit a new high, a majority of stocks in the index have consistently climbed ... [...]

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A Tepid Rally As Coffee And Sugar Sour

This is an abridged version of our Daily Report.A really, really tepid rallyIn the past 90 days, there have been only 3 breadth thrusts, a tepid run as the S&P 500 nears a new high.Rallies with few thrusts did worse going forward than rallies with more of them, but even so the returns were still ... [...]

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Mid And Small Cap Stocks Diverge At Highs As Emerging Market Volatility Soars

This is an abridged version of our Daily Report.About those new highsMid and Small Cap indexes are hitting new 52-week highs, leading the Large Cap S&P 500 index as we saw on Tuesday. But fewer of those mid- and small-cap stocks in the indexes are also reaching 52-week highs.Similar divergences ... [...]

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Mid And Small Caps Break Out As Financial Conditions Ease Amid VIX Decline

This is an abridged version of our Daily Report.Large caps lag mids and smallsThe S&P Mid Cap and Small Cap indexes have hit new 52-week highs this week while the large-cap S&P 500 still has not.The lagging S&P 500 tends to catch up, with all three indexes usually rallying in the months ... [...]

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Dow's Long Correction With Positive S&P Breadth

This is an abridged version of our Daily Report.The Dow’s long correctionThe Dow has gone 130 days without a new high or 20% loss, one of its longer stretches in purgatory. Other periods when it got stuck in a correction mostly resolved higher, with a choppy 1-2 months generally leading to new ... [...]

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Breadth Divergences Not Much Of A Concern As Staples Recover

This is an abridged version of our Daily Report.Few highs as indexes rallyThe S&P 500 has rallied close to its prior highs, but there is a divergence. Relatively few stocks are registering 4-, 12-, and 52-week highs as the index rallies.It’s a concern among technicians but has not been a ... [...]

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Leaders Become Laggards As Traders Bet On Volatility

This is an abridged version of our Daily Report.Leaders become laggardsThe Nasdaq Composite and Russell 2000 have lost their 50-day averages after months above, a change from June when both were leading the market. Even with the S&P 500 and Dow Industrials above their averages, future returns ... [...]

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Risk Appetite Wanes As Small-Caps' Trend Ends And Funds See Outflows

This is an abridged version of our Daily Report.Lack of risk appetiteDiscretionary stocks are at a multi-month low relative to defensive Staples.That sign of risk-off behavior is unusual with the S&P near a high but has not been a good excuse to sell stocks.Another trend endedThe small-cap ... [...]

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Momentum Worries As Emerging Stocks Start Uptrending

This is an abridged version of our Daily Report.Momentum worriesAs the S&P hit a 100-day high, a very low % of stocks are showing momentum. An almost record low % of stocks are above their 10-day avg or have an RSI > 70, which has preceded weak shorter-term returns or failed rallies.Emerging ... [...]

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Nasdaq Stocks Lag While Emerging Market Nerves Hit High

This is an abridged version of our Daily Report.Some lag during latest legThe Nasdaq Composite closed at a 52-week high on Friday but relatively few stocks have come along, with fewer than 60% of members trading above their 50- and 200-day averages.The one-year return in the Nasdaq averaged ... [...]

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Good Growth During Earnings Season As Nasdaq Leads

This is an abridged version of our Daily Report.A great season of earningsEarnings season is expected to bring another quarter of impressive growth.When that growth is high, however, earnings season carries more risk than reward.Tech is leading the chargeThe Nasdaq Composite is leading the four ... [...]

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Breadth Momentum Improves As Equal Weight S&P Lags

This is an abridged version of our Daily Report.An uptick in momentumThe McClellan Oscillator has turned positive after weeks below zero.In a bull market, that has led to good medium-term returns, especially since 1984 when it led to gains over the next 6 months 18 out of 20 times.Don’t forget ... [...]

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World Markets And Platinum Fall As Utilities Streak Higher

This is an abridged version of our Daily Report.World stocks hit 2018 lowWorld stocks have hit a 200-day low while the S&P 500 is more than 8% above its own 200-day low. Similar setups led to a rebound in World stocks over the next 2-4 weeks.Compared to the S&P, World stocks outperformed every ... [...]

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GE Booted From Dow As Russell And Nasdaq Hit Highs

This is an abridged version of our Daily Report.Somebody turn on the lightsGE got booted from the DJIA after 100 years, after a similar stretch of poor returns from Alcoa when it was removed…and before it doubled during the next year.Other stocks that got removed from the Dow did fine going ... [...]

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Gold Bugs' Bad Day As Cap-Weighted Indexes Take Over

This is an abridged version of our Daily Report.Gold bugs’ ruined weekendHeading into the weekend, gold futures suffered their largest loss in over a year, to a multi-month low. When it happened it May, the selling marked an exhaustion and gold worked higher. Most times it did something similar, ... [...]

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Euro Death Cross As Down Days Swamp Up Days, Staples Stabilize

This is an abridged version of our Daily Report.Euro Death CrossFor more than a year, the euro’s 50-day average has been above its 200-day average.That trend has now ended, after one of the longest streaks in the currency’s history. The end to other long streaks led to further weakness in the ... [...]

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Breadth Momentum Picks Up As Value Lags Growth And Homebuilders Turn Up

This is an abridged version of our Daily Report.Momentum is picking upMomentum in breadth figures is returning, with the McClellan Summation Index climbing. When it reaches 500 for the first time in months, it has led to an excellent risk/reward skew for stocks.The S&P 500’s annualized return ... [...]

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Nasdaq Hits New High With Fewer Stocks Coming Along

This is an abridged version of our Daily Report.Some tech stocks struggle to keep upThe S&P 500 Technology index has hit new highs the past two days, but fewer of its stocks are coming along. In January and March, more than 40% of its members hit 52-week highs, compared to only 15% on ... [...]

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Few S&P Stocks Above Average As Copper Baffles Bulls

This is an abridged version of our Daily Report.The biggest divergence since 2000As the S&P 500 hits a 50-day high, too few of its members are trading above their short-, medium, and long-term averages. The percentage of stocks trading above their averages is far below what we usually see.The ... [...]

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Big Thrust In Up Volume As Junk Bond Metrics Diverge

This is an abridged version of our Daily Report.Kind of a thrustWe still haven’t had a “breadth thrust” with more than 90% of NYSE volume flowing into advancing stocks. But Wednesday’s session had the best ratio since November 2016, nearly 400 sessions ago.A big Up Volume figure for the first ... [...]

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Small Caps Lead As Staples Lose Relevance And Energy Can't Lose

This is an abridged version of our Daily Report.The leading indexSmall cap stocks, via the Russell 2000 index, are leading the other major indexes in the race to new highs. It’s the only index that has reached a 52-week high in the past 30 days.Other times it led to new highs, it was an ... [...]

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Breadth Reaches New High As Oil, Stocks Rally Together

This is an abridged version of our Daily Report.A breakout in breadthThe Cumulative Advance/Decline Line has made a new all-time high.Since 1940, that has led to a smaller chance of a large decline going forward, and a smaller average drawdown. When the S&P has lagged the A/D Line like now, it ... [...]

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S&P Breaks Out As Tech, Energy Highs Surge And

This is an abridged version of our Daily Report.A broken pattern emboldens bullsThe S&P 500 put in consecutive lower highs since the January peak, but broke that to the upside on Thursday.The initial breakout from a coiled pattern has a high failure rate in the medium-term. Similar breakouts ... [...]

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Small Caps Shine As Financial Conditions Tighten And VIX Drops

This is an abridged version of our Daily Report.Small caps trying to drag us higherThe small-cap Russell 2000 is within 1% of an all-time high, while the S&P 500 is still more than 5% below.That’s usually taken as a universally good sign for stocks in general. It hasn’t been that easy, ... [...]

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Nasdaq Breadth Is (Too) Good As Buyers Finally Persist Intraday

This is an abridged version of our Daily Report.Tech breadth remains impressiveA few major Tech stocks get all the attention, throwing a shadow over all the other members. So far this year, the sector is showing some of the best breadth readings since 1990, with broad participation.Even if there ... [...]

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Consumers Turn Bearish As Dow, Staples Decline

This is an abridged version of our Daily Report.Consumers are buying…just not stocksThe latest Consumer Confidence survey shows more consumers expect stocks to decline than rally. That’s the first time since the November 2016 election that the U.S. consumer has been bearish on stocks.Other times ... [...]

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Consumer Staples Have Been Historically Unstable

This is an abridged version of our Daily Report.So much for being a StapleConsumer Staples stocks have taken a big hit over the past couple of days (and weeks). Many of what had been considered safe stocks are down more than 5% in just two days. More than 25% of them are now trading at their ... [...]

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Back Above A Technical Level As Volatility Drops And A/D Line Hits A High

This is an abridged version of our Daily Report.Indexes reclaim technical levelsAccording to media reports, Tuesday’s jump in the Dow and S&P above their 50-day averages was important. The Dow does tend to have markedly better annualized returns when trading above its average.But as an all-clear ... [...]

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No Thrust As Big Money Pulls Back

This is an abridged version of our Daily Report.Two weeks and still no thrustStocks have been rallying for a couple of weeks, but there hasn’t yet been a 90% Up Volume day.Forward returns when there has been a 90% day in the first two weeks were excellent, not so much when not. That is a minor ... [...]

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Wall Street Sentiment As Few Fidelity Funds Beat Cash

This is an abridged version of our Daily Report.An undervalued marketStocks are undervalued, at least according to Wall Street strategists. They expect the S&P 500 to end the year more than 10% above where it is, enough to suggest they think the index is undervalued.When they’ve been so adamant ... [...]

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All Or Nothing As Every Financial And Dow Stock Declines

This is an abridged version of our Daily Report.All or nothingIn the past 11 sessions, there have been 8 all-or-nothing days, when Up Volume was above 80% or below 20%.Even bear markets rarely see this level of uncertainty. Forward returns had a strong tendency to be positive, especially over ... [...]

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Failed Bounce And Put Purchases

This is an abridged version of our Daily Report.Failed bounceBefore some modest after buying interest, the most important index in the world triggered a failed bounce.That’s one of the most feared patterns for bulls because it shows a complete lack of buying interest. The S&P did suffer ... [...]

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Gold Miners Lag As Investment Managers Sell

This is an abridged version of our Daily Report.Miners’ minor monthsGold mining stocks have underperformed gold prices by more than 10% over the past couple of months.Due to their higher volatility, this is considered a negative for gold prices going forward. There is some modest truth to this, ... [...]

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Neutral Investors, With Soaring Small-Caps And Dow Theory Warning

This is an abridged version of our Daily Report.Mom and pop just shrugIndividual investors have become neutral to one of the most extreme degrees in the past 15 years.That’s usually a good sign in a bull market, especially longer-term. It’s also been a good sign that there are more bears than ... [...]

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Lopsided Volume Swings As MLPs Suffer Pessimism

This is an abridged version of our Daily Report.Everybody out, then in, then out againDuring the past month, volume has been gyrating wildly between losing, winning, then losing securities. A 3-day average of the Up Volume Ratio keeps swinging from one extreme to the other.During uptrending ... [...]

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A "Good" Correction As Silver Specs Give Up

This is an abridged version of our Daily Report.Good vs bad correctionsIn these first two weeks following the Dow’s drop into a correction, it has followed the path of many “good” corrections. Those are times when the Dow fell 10% from a high, then no more than a further 7% during the next ... [...]

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Correlations Go Back To Normal Without A Breadth Thrust

This is an abridged version of our Daily Report.Correlations go back to normalAs stocks sold off, correlations between sectors rose as they usually do and are back at a normal level. That has reversed a period when correlations were almost at the lowest level in history, eclipsed only by the ... [...]

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Best Recovery Ever As Investors Flee Bonds

This is an abridged version of our Daily Report.Best recovery everAfter falling into a correction a week ago, the Dow Industrials index has rallied every day and added 5.6%. That ranks among its best-ever recoveries after falling more than 10% below its high for the first time in months.Other ... [...]

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Panic And Reverse

This is an abridged version of our Daily Report.Panic and reverseStocks suffered a panic day on Monday, then reversed early losses to close higher. That matches several other instances that led to consistent returns going forward.There was volatile back-and-forth then another run at the prior ... [...]

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Cornucopia Of Extremes

With the rapid moves and number of extremes, there are quite a few things that stick out beyond what we went over in the report on Monday. These are what we posted to the private Twitter feed, which you have access to if you're receiving this Note via email. Just request to follow ... [...]

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Breadth Gets Oversold As Consumer Confidence Rises

This is an abridged version of our Daily Report.Oversold alreadyAt least one primary breadth indicator is showing that recent selling pressure is extreme. It’s rare to see the McClellan Oscillator this stretched to the downside just a few days after an all-time high in the S&P.Similar readings ... [...]

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Fund Managers Ignore Cash As Streaks End

This is an abridged version of our Daily Report.Fund managers still hate cashMutual fund managers are holding a near-record low amount of cash according to the latest figures. That was easier to justify when interest rates were nearly zero but gets harder as rates rise.Their cash deficit is now ... [...]

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Options Traders Pour Into Calls As Breadth Lags

This is an abridged version of our Daily Report.Forget stock, call options have more oomphRetail traders have returned in a big way. We saw on Friday the surge in brokerage transactions, and that has bled over into the options market. The smallest of options traders put on a skyrocketing number ... [...]

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Record Gaps As Investors Pour In

This is an abridged version of our Daily Report.Green every morningStocks have been gapping up in the morning almost every day. During the past 30 sessions, more than 85% of them have seen the futures open higher than the prior close.That is – by far – the most since futures began trading in ... [...]

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Dollar Ignores Rates As S&P Shows Exhaustion

This is an abridged version of our Daily Report.Ignoring the rise in ratesDespite a steady rise in interest rates, the U.S. dollar has declined more than 10% over the past year.That’s unusual, especially given the magnitude of the fall in the dollar and the rise in rates. The other times it ... [...]

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Doubling Up Moving Average As S&P Members Get Overbought

This is an abridged version of our Daily Report.Doubling up the averagesThe S&P is 3% above its short-term moving average, 6% above its medium-term and 13% above its long-term.It hasn’t managed to “double up” its gains above each successive moving average in 20 years. Similar bouts of momentum ... [...]

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Gapping Up And Nasdaq New Highs

The remarkable run in stocks is set to continue this morning, with the futures indicated to gap up again this morning.In yesterday's report, we took a look at the 3-week rise in the S&P, totaling more than 6% as of Monday's close. And, of course, it also reached a new 52-week (and all-time) ... [...]

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Burst Of New Highs As Optimism Hits 30-Year High

This is an abridged version of our Daily Report.A rare burst of new highsMost of the major indexes and sectors had more than 25% of their stocks hit a 52-week high on Tuesday. Only Staples and Utilities saw fewer than 10% of their stocks hit a new high. On average across indexes and sectors, 27% ... [...]

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Gap Up While Bears Scatter And New Highs Jump

For those who don’t follow the premium Twitter account, which you have access to if you’re receiving this message, following are some of the studies and indicators that were posted today. If you’d like to follow the Twitter account, please request to follow @SenTrader_Prem on Twitter then send ... [...]

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The S&P's Momentum Streak Aided By Industrials

This is an abridged version of our Daily Report.The S&P’s consistent, rapid rallyThe most important index in the world has rallied consistently for the past 1, 3, and 6 months. It has also picked up its gains, nearing or exceeding its upper Bollinger Band on daily, weekly, and monthly time ... [...]

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Seasonality, Utilities, and Junk

For those who don’t follow the premium Twitter account, which you have access to if you’re receiving this message, following are some of the studies and indicators that have been posted over the last couple of days. If you’d like to follow the Twitter account, please request to follow ... [...]

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Market Oddities And Nikkei Reversal

For those who don't follow the premium Twitter account, which you have access to if you're receiving this message, following are some of the studies and indicators that have been posted over the last couple of days. If you'd like to follow the Twitter account, please request to follow ... [...]

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Financials Trying To Emerge From Oversold

Over the past few months, financials have gotten hit hard. During the past week, fewer than 20% of members in the sector were trading above their 50-day moving averages, a deeply oversold reading, especially during the past 8 years of this bull market.That weakness has pushed Financials to be ... [...]

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The Dow's Dominant Stock

As mentioned last week, we've started a private Twitter feed for premium subscribers, and so if you're reading this post as it's published, you have access to that feed at @SenTrader_Prem. Just request to follow that account on Twitter and send us an email at admin "at" sentimentrader.com to ... [...]

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Another Jump In New Lows

The oddities continue to pile up.In the Report on Wednesday, we looked at times when declining volume outpaced advancing volume for almost two weeks, while stocks gained during that time. Very rare.In late May, we looked at times when many stocks within the S&P 500 index reached a 52-week high, ... [...]

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New Lows Among The S&P

In the Report on Thursday, we took a look at the oddly low amount of volume flowing into securities on the NYSE for a day the S&P 500 rallied to a new high.One of the issues with using NYSE breadth is that it's impacted by issues that have nothing to do with the S&P 500 itself.But even within ... [...]

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Materials, Info Tech New High Surge

Among the major S&P 500 sectors, the two biggest winners so far year-to-date have been materials and information technology. Both have gained upwards of 5% already in 2017.The push to multi-year highs in those sectors have been accompanied by a surge in their component stocks trading at 4-week, ... [...]

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Stocks Struggle To Match The S&P

Don Quixote: Dost not see? A monstrous giant of infamous repute whom I intend to encounter.Sancho Panza: It's a windmill.Don Quixote: A giant. Canst thou not see the four great arms whirling at his back?Sancho Panza: A giant?Don Quixote: Exactly. Pointing out any weakness lately has been an ... [...]

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Nasdaq's Bad Breadth, Too

This morning, respected technician Helene Meisler made an observation on breadth that was notable:https://twitter.com/hmeisler/status/817737481663709184That reinforces what we discussed in the report on Friday about the weak breadth not necessarily being isolated to ravages in the bond ... [...]

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Breadth Thrust In Euro Stocks

With the big rally in major stocks in the eurozone (at least in euro terms), the most impressive breadth readings in the world have now been recorded in those stocks.Looking at an array of indicators across time frames, we can see that there has been a huge block of buying interest in the stocks ... [...]

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Surge In Financials At 52-Week Highs

One of the most notable developments in stocks in recent days has been the surge in the number of stocks reaching 52-week highs. As noted in Thursday's report, across the NYSE and Nasdaq exchanges, we're seeing one of the largest breakouts in 30 years.That's often a good sign long-term, but ... [...]

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All Four Major Indexes At New Highs

I'm not really in the office this week, but we had quite a few questions about the simultaneous new highs in all of the major indexes on Monday. Buyers are following through on their normal pre-holiday binge, and managed to close the S&P 500, Dow Jones Industrial Average, Nasdaq Composite, and ... [...]

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ETF and Sector Indicators at an Extreme - Sept 30 2016

Currently, there are 5 ETF Sector and Breadth indicators at an Optimistic Extremes and 14 Stock indicators at Pessimistic Extremes.The tables below display stock market indicators that are at Very Optimistic, Extremely Optimistic, Very Pessimistic or Extremely Pessimistic levels. Note: These ... [...]

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Utilities Have Been (Too) Strong

In Wednesday's Report, there was a note about the high number of utilities stocks that reached a 52-week high recently. At more than 80% of components in the S&P 500 utilities sector, it is the most since 1990 except for December 26, 2014. Utilities formed a peak shortly thereafter.The run in ... [...]

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Almost Every Member Of The Dow Is Rising

With a surge in stocks on Tuesday, breadth figures are impressive. In the Dow, the only negative member today is Boeing.If it sticks into the close, this will be the first time since early April that at least 29 members of the Dow rose together. This is coming on the heels of what had been a ... [...]

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Utilities Average Is Stretched

With utility sector stocks doing so well, it's no surprise that most members of the Dow Jones Utility Average are trading above their moving averages. The rally has been swift and sustained enough that more than 95% of the stocks in the index are now trading above their 10-, 20-, 50- and 200-day ... [...]

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Bad Breadth On A Good Day

Breadth is not good today, despite most of the major indexes pushing to new 90-day highs.On the NYSE, the Up Issues Ratio is at 43%, one of the worst figures in 50 years on a day the S&P 500 closed at a 90-day high. There is still some time in the session, but even if the S&P closes modestly ... [...]

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Up Volume Going For 3 In A Row Above 80%

There is still a few hours to go in today's session, but buyers are working on a third straight day of impressive pressure.Friday, Tuesday and today (so far) have all seen more than 80% of volume on the NYSE flowing into stocks that are positive on the day.From the intraday charts:The last time ... [...]

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Italian Stocks Are The Worst Of The Worst

As bad as U.S. markets have been, traders could be excused for thinking, "At least we're not in Italy."The latest breadth figures are out, and it's about as ugly as it gets in Italian stocks. Across all major U.S. sectors and broad foreign markets, nothing is as beaten down as Italian ... [...]

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Shanghai Breadth Nears Record For Selling Persistence

The selling pressure in Chinese shares has been relentless in January and shows no signs of letting up as the Shanghai Composite dives to yet another yearly low.There is not a consistent relationship between that index and U.S. stocks. It's a fascination among many market-watchers but share ... [...]

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Breadth Flush Pt 2 - New Lows

The breadth flush today is getting more notable.If the figures stand as they currently are into the close, then since 1940, only October 19, 1987 and August 8, 2011 will have seen more lopsided Up Volume over 1-day and 10-day periods.New lows are climbing continually higher and it will not ... [...]

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Breadth Flush

Markets are now entering "puke" territory, at least in terms of market breadth.There have been over 1,228 securities on the NYSE that traded to a 52-week low, and it is rising rapidly. It reached 1,342 on August 24 and is getting close to 40% of all issues, a rarely-achieved level.Even more ... [...]

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Selling Off After We're Already Oversold

Whenever stocks are oversold and start to sell off even more, then it is a truism that we'll hear the cliche:Markets crash when they're oversoldIt happened on Black Monday in 1987, so...sure, it happens. Anything can and does happen in the markets. But is it a good bet?Selling short a market ... [...]

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