| To: Ditchdigger who wrote (34382) | 8/22/2022 4:36:03 PM | | From: J.B.C. | | | |
Observations:
Markets took a notable breather, causing the S&P 500 to snap its four-week winning streak as did the Nasdaq Composite.
The exhale appears healthy given the near-term frothiness. For example, the S&P 500 and Nasdaq each posted 70%+ readings on their weekly distribution curves for the first time since November of 2021.
Furthermore, the S&P 500 Index Funds group ranked in the 95th percentile against 135+ other groups for the first time since January, suggesting a domineering technical profile.
Also on our group scores page, the consumer discretionary average score has not overtaken consumer staples; in fact, the divergence between the two has widened. Note this is not usual for a material market recovery.
Something to watch outside equities is the US Treasury 10 YR Yield Index as it rose to give a fourth consecutive buy signal and reenter a positive trend at 2.975% last week.
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| To: Ditchdigger who wrote (34382) | 8/22/2022 4:39:17 PM | | From: J.B.C. | | | | 
Observations:
Markets took a notable breather, causing the S&P 500 to snap its four-week winning streak as did the Nasdaq Composite.
The exhale appears healthy given the near-term frothiness. For example, the S&P 500 and Nasdaq each posted 70%+ readings on their weekly distribution curves for the first time since November of 2021.
Furthermore, the S&P 500 Index Funds group ranked in the 95th percentile against 135+ other groups for the first time since January, suggesting a domineering technical profile.
Also on our group scores page, the consumer discretionary average score has not overtaken consumer staples; in fact, the divergence between the two has widened. Note this is not usual for a material market recovery.
Something to watch outside equities is the US Treasury 10 YR Yield Index as it rose to give a fourth consecutive buy signal and reenter a positive trend at 2.975% last week.
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Observations:
Markets took a notable breather, causing the S&P 500 to snap its four-week winning streak as did the Nasdaq Composite.
The exhale appears healthy given the near-term frothiness. For example, the S&P 500 and Nasdaq each posted 70%+ readings on their weekly distribution curves for the first time since November of 2021.
Furthermore, the S&P 500 Index Funds group ranked in the 95th percentile against 135+ other groups for the first time since January, suggesting a domineering technical profile.
Also on our group scores page, the consumer discretionary average score has not overtaken consumer staples; in fact, the divergence between the two has widened. Note this is not usual for a material market recovery.
Something to watch outside equities is the US Treasury 10 YR Yield Index as it rose to give a fourth consecutive buy signal and reenter a positive trend at 2.975% last week.
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| To: J.B.C. who wrote (34384) | 8/31/2022 10:58:16 AM | | From: J.B.C. | | | | A Closer Look at the Latest BPNYSE Reversal
Following Monday’s action, the bullish percent for NYSE Stocks [^BPNYSE] reversed down into Os to 50%. This comes after the indicator reversed up into Xs on June 28th at 26% and moved up to 58% by the close on August 16th. Since August 17th, the reading for BPNYSE has dialed back as stocks have moved back to sell signals. Fortunately, the BP still indicates that more than half the stocks in the NYSE universe are trading on point and figure buy signals. But while that is a bit of a silver lining, we did want to address what DWA Sectors contributed most to the reversal into Os for the BPNYSE. Most of the sell signals have come within the past weeks’ worth of action, and the bulk of those have come within the past two days of trading. The sectors where stocks have shifted to sell signals recently have been from laggard sectors that have shown notable rallies since mid-June. When we see reversals such as this on indicators, we must evaluate our positions. If there are holdings that have moved to a sell signal and/or violated near-term support, these are the ones we would look to address.
In addition to the BPNYSE reversing down into Os, there was also an intriguing development for the All-Equity Funds group on the Asset Class Group Scores page. As of Monday’s close, the All-Equity Funds group had a current score of 2.5 after having hit a near-term score high of 2.64 on August 16th. In a prior report, we had noted the group moving back above the 2.5 score line earlier this month for a second time this year. Historically, the All-Equity Funds group moving back above 2.5 has been a decent indicator for equities improving, but there have only been two rolling 12-month periods in which the group fell below the score of 2.5 on two separate occasions. In the most recent 12-month roll, All Equity Funds first scored below 2.5 from May 9th to May 26th and from June 10th to August 5th. The only other time during a 12-month roll that the score fell below 2.5 twice was from 9/4/2015 to 10/7/2015 and 1/7/2016 to 3/16/2016. As it stands today, if the All-Equity Funds group were to fall below the 2.5 score threshold again it would mark the third time in a 12-month rolling period – which has never happened before.
Looking back to the 2015/2016 “double-dip” the most notable observation is the 3- and 6-month returns following the first dip as this performance period also fell within the All-Equity Funds group falling below 2.5 the second time. Near- to intermediate-term returns following this 2015/2016 double dip are mixed – although the returns following the second dip are improved over the first. While one-year out does look positive, that doesn’t mean we may not experience volatility on our way there. |
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| To: J.B.C. who wrote (34385) | 9/25/2022 9:47:06 AM | | From: J.B.C. | | | | September has lived up to its reputation as one of the worst months for the market this year. Starting with a higher-than-expected CPI print and then more hawkish statements from the Fed yesterday, equity and fixed income markets have taken a hit across the board. This led to the Money Market Percentile Rank reaching 77.46%, an increase of almost 35% in a single day. Much has been noted about the overall weakness of the fixed income market which has helped buoy the Money Market Percentile Rank to rest at higher-than-normal levels, but the recent move saw the group leap above numerous equity-related groups. The average group score for US Money Market is still below 3.0 and is now 2.68 which is still lower than it was for much of this year. The group has yet to cross above the 3.0 score mark since 2020 which it did for less than a week. The only prolonged period the US Money Market group was able to spend time above the 3.0 score threshold was from 2007-2009. Even though the US Money Market’s score is lower than it was earlier this year, the Money Market Percentile Rank is at the highest level this year due to broadening weakness across asset classes. The number of groups with an average score above 3.0 is only 18, two of which are the Inverse-Market and Inverse-Fixed Income groups. Even in mid-June when the S&P 500 put in a 52-week low, there were 21 groups with an average score above 3.0.
When observing MMPR (Money Market Percentile Rank) historical data, this is the first time since 2007-2008 where the MMPR went above 50% then came back down below 25%, and then moved back above 50% This is concerning, and it speaks to the vicious swings to the downside and upside we’ve had so far this year. A silver lining is the US Equity Core Percentile Rank, which is still sitting at 90%. This was not the case in 2007-2008 when the Core Percentile Rank was below 50%. However, it must be stated that our history is somewhat limited as it only goes back to the mid-2000s. The weakness in the fixed income market and the prospect of a prolonged period of higher interest rates is not something markets have had to deal with for decades. This does impact asset class rankings due to fixed income not operating as a backstop to a weak equity market. Given this dynamic, relative strength in equities when compared to fixed income may hold up longer than usual since both are moving, albeit at different rates, in the same direction. With this dynamic, it is still encouraging to see the Core hold up as well as it has on a relative basis so far this year. Both the Money Market Percentile Rank and the US Equity Core Percentile Rank are worth keeping close eyes on and possibly setting alerts on to closely follow movement as it occurs. |
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| From: J.B.C. | 9/27/2022 3:09:39 PM | | | | | | This is the 10 week on their (DWA) stack chart:
The 10 week (short term indicator) is wound extremely tight. |
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| To: J.B.C. who wrote (34389) | 10/28/2022 9:23:37 AM | | From: J.B.C. | | | | More positive thrusts in the indicators:
FUND SCORE OVERVIEW
Two notable developments have occurred this week – one from a closely followed indicator and another from a group we often follow. The Bullish Percent for All Equity Funds ^BPMU0@2 reversed back into Xs following Tuesday’s action to 24%, and Wednesday’s action saw the indicator push higher to 28%. For those not familiar with the Bullish Percent for All Equity Funds, it measures the percent of all equity-based funds - this universe includes global, domestic, and international equity funds – on a point and figure buy signal on their intermediate-term trend chart (the default trend chart). Said in plainer English, just over a quarter of all equity-based funds – both ETF and mutual funds – are on a point and figure buy signal. This move up comes after the indicator had fallen to 10%, its lowest level since 2020. Outside of 2020, the only other period in which the indicator moved to or below 10% was 2008 and 2009. The reversal in the BP for All Equity Funds also coincides this week with the reversals by the BP for the NYSE ^BPNYSE and S&P 500 ^BPSPX, which focus on measuring stocks on point and figure buy signals within those given universes. Like the stock bullish percent indicators, moves up from low levels have historically been an opportunity to participate as positions rally, and on average returns 12 months out are positive. But while still near these low levels, investors should focus any allocation towards equities to those exhibiting upside movement and participating in the indicators increase. From here, we look for further improvement within the indicator and we will see if we are able to revisit or better the 56% chart high seen back in March and August.
In addition to the BP for All Equity Funds, the S&P 500 Index Funds (Core) group climbed back above the score of 3 following Tuesday’s action after scoring at or below the level since the latter part of September. This is the second time this year the S&P 500 group has fallen below the score of 3, and this is the first time this has occurred in a 12-month rolling period since the latter part of 2015 and early 2016. With the uptick in score above the 3.0 score threshold, the Core group is now scoring above 3 along with the US Money Market Group for only the third time ever – the other two times were in December 2018 and August through October of 2007. Moving forward, a sustained score above 3 or further score improvement and moving back above the US Money Market group would add positive evidence for Domestic Equities.
Along with the Core group improving above the score of three, two sector groups also achieved the feat over this past week. Biotechnology and Healthcare both climbed above the score of 3 following Wednesday’s action for the first time since August. Looking at the rally over the past week Biotechnology and Healthcare were among the ten best performing in the DWA 40 Sectors; Biotech DWABIOM gained 6.89%, while Healthcare DWAHEAL gained 6.46%. From a trend perspective, a few Biotech ETFs – the iShares Biotechnology Fund IBB, VanEck Biotech BBH, and First Trust Biotechnology Fund FBT – moved back into positive trends in addition to giving buy signals this week.
Among the three, FBT maintains the highest fund score of any Biotech ETF on the system at 3.94 – 0.81 points higher than the average Biotech ETF or Mutual Fund. FBT also maintains the lowest beta at 0.57 among the three aforementioned funds. Weekly momentum is now positive after having been negative for nine weeks and monthly momentum has been positive for two months after having been negative for 12 months prior. Recent trend chart action has led to consecutive buy signals as the fund shifted the trend back to positive in the process. Additionally, a series of higher bottoms from $130 to $134 offer notable support above the summer chart lows, which isn’t something many equity-based funds can claim.
Broadly speaking, further improvement out of Domestic Equities is needed to give confidence before putting assets back to work. But seeing indicators reverse back into Xs as stock and funds return to buy signals is a start.
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| To: J.B.C. who wrote (34390) | 11/13/2022 11:29:20 AM | | From: J.B.C. | | | | One of my most primary indicators (longer term)went positive on the market after Friday's action.
AdvocatusDiaboli 35 Point SPX chart broke out of a bullish triangle and is right up against the bearish resistance line.
Positive are building. I'm putting together my shopping list and will be adding in the next week. |
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| To: J.B.C. who wrote (34391) | 11/16/2022 11:47:58 AM | | From: J.B.C. | | | | Weakening dollar has helped propel the market but is oversold. Weekly Positive Momentum on S&P 500 is at the top of it’s normal range. Together suggesting a near term pull back is in order.
Added some into the market on Monday, I’ll be looking for a pullback to add more from my shopping list.
Dollar:
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