9/22/2017

Author: Wayne A. Thorp, CFA

Weekly Computerized Investing Market Dashboard Summary

This week, none of the Dashboard indicators triggered new signals. Furthermore, none of the indicators triggered confirming bearish or bullish signals.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) gained 0.12% this week and closed at $125.54. For the 46th consecutive week, dating back to November of last year, the ETF closed above its 100-day moving average. Therefore, this indicator remains BULLISH. The 100-day moving average of IYY's closing price ended the week at 122.21, up from 121.89 last week. The spread between the IYY closing price and the moving average narrowed to +2.72% from +2.87% a week ago. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain BULLISH. If IYY were to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are the same, the indicator will trigger a new neutral signal.
  • The MACD of IYY ended the week clearly above its signal line. Therefore, for the fourth consecutive week, this indicator is BULLISH. The MACD of IYY stands at +0.754 while the signal line is at +0.623. As long as the MACD ends the week clearly above its signal line, this indicator will remain BULLISH. If the MACD were to end the week with clear separation with its signal line to the downside, this indicator would trigger a new bearish signal. If the MACD were to end the week basically in line with its signal line, this indicator would trigger a new neutral signal.
  • Both component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator ended this week flashing bullish signals. For the fourth week in a row, this composite indicator is BULLISH. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. $NASI ended this week above its moving average, which is BULLISH for this component indicator. $NASI ended the week at +320.63 versus the moving average at +252.66. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD ended the week clearly above the signal line. This is a BULLISH condition for this component indicator. The MACD of $NASI is +97.821 while the signal line is +48.851. This composite indicator will remain BULLISH as long as the component indicators are both flashing bullish signals. This composite indicator would trigger a new bearish signal if the two component indicators both were both flashing bearish signals. This composite indicator would trigger a new neutral signal if the two component indicators were not in agreement.
  • AAII Investor Bullish Sentiment dipped 1.2 percentage points this week to 40.1%. This indicator will remain BULLISH until November 30, 2017. If the indicator triggers a confirming bullish signal by falling below 25% and then rising above it, the “stale date” would be pushed back six months from the date of the confirming bullish signal. If there has not been a confirming bullish signal by November 30, the bullish signal will go “stale” and revert to neutral. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls back below it.

For the week ended September 22, 2017, four CI Market Dashboard indicators are bullish, five indicators are neutral and none are bearish.

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9/15/2017

Author: Wayne A. Thorp, CFA

Weekly Computerized Investing Market Dashboard Summary

This week, none of the Dashboard indicators triggered new signals. In addition, none of the indicators triggered confirming bearish or bullish signals.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) gained 1.64% this week to close at $125.39. For the 45th consecutive week, dating back to November of last year, the ETF closed above its 100-day moving average. Therefore, this indicator remains BULLISH. The 100-day moving average of IYY's closing price ended the week at 121.89. The spread between the IYY closing price and the moving average widened to +2.87% from +1.51% a week ago. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain BULLISH. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week clearly above its signal line. For the third week in a row, this indicator is BULLISH. The MACD of IYY stands at +0.618 while the signal line is at +0.365. As long as the MACD ends the week clearly above its signal line, this indicator will remain BULLISH. If the MACD was to end the week with clear separation with its signal line to the downside, this indicator would trigger a new bearish signal. If the MACD was to end the week basically in line with its signal line, this indicator would trigger a new neutral signal.
  • Both component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator ended this week flashing bullish signals. For the third week in a row, this composite indicator is BULLISH. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. $NASI ended this week above its moving average, which is BULLISH for this component indicator. $NASI ended the week at +146.63 versus the moving average at +70.87. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD ended the week clearly above the signal line. This is a BULLISH condition for this component indicator. The MACD of $NASI is +36.223 while the signal line is -15.712. This composite indicator will remain BULLISH as long as the component indicators are both flashing bullish signals. This composite indicator would trigger a new bearish signal if the two component indicators both were both flashing bearish signals. This composite indicator would trigger a new neutral signal if the two component indicators were not in agreement.
  • AAII Investor Bullish Sentiment jumped 12 percentage points this week to 41.3%. This indicator will remain BULLISH until November 30, 2017. If the indicator triggers a confirming bullish signal by falling below 25% and then rising above it, the “stale date” would be pushed back six months from the date of the confirming bullish signal. If there has not been a confirming bullish signal by November 30, the bullish signal will go “stale” and revert to neutral. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls back below it.

For the week ended September 15, 2017, four CI Market Dashboard indicators are bullish, five indicators are neutral and none are bearish.

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9/8/2017

Author: Wayne A. Thorp, CFA

Weekly Computerized Investing Market Dashboard Summary

Since the last CI Market Dashboard update, two Dashboard Indicators triggered new bullish signals, both switching from bearish. However, none of the indicators triggered confirming bearish or bullish signals.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) fell 1.45% this week to close at $123.37. However, for the 44th consecutive week, dating back to November of last year, the ETF closed above its 100-day moving average. Therefore, this indicator remains BULLISH. The 100-day moving average of IYY's closing price ended the week at 121.53. The spread between the IYY closing price and the moving average now stands at 1.51%. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain BULLISH. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week clearly above its signal line. Since the last weekly update, the MACD has made a bullish crossover of the signal line. Therefore, this indicator is now BULLISH. The MACD of IYY stands at +0.18 while the signal line is at +0.074. As long as the MACD ends the week clearly above its signal line, this indicator will remain BULLISH. If the MACD was to end the week with clear separation with its signal line to the downside, this indicator would trigger a new bearish signal. If the MACD was to end the week basically in line with its signal line, this indicator would trigger a new neutral signal.
  • Both of the component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator ended this week flashing bullish signals. This is a change since the last update, so this indicator has triggered a BULLISH signal, switching from bearish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. $NASI ended this week above its moving average. Since the last update, $NASI made a bullish crossover of the moving average, triggering a new BULLISH signal for this component indicator. $NASI ended the week at -60.38 versus the moving average at -112.88. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD closed above its signal line. Since the last update, the MACD made a bullish crossover of its signal line, triggering a new BULLISH signal for this component indicator. The MACD of $NASI is -37.24 while the signal line is -75.149. This composite indicator will remain BULLISH as long as the component indicators are both flashing bullish signals. This composite indicator would trigger a new bearish signal if the two component indicators both were both flashing bearish signals. This composite indicator would trigger a new neutral signal if the two component indicators were not in agreement.
  • AAII Investor Bullish Sentiment climbed 4.3 percentage points this week to 29.3%. This indicator will remain BULLISH until November 30, 2017. If the indicator triggers a confirming bullish signal by falling below 25% and then rising above it, the “stale date” would be pushed back six months from the date of the confirming bullish signal. If there has not been a confirming bullish signal by November 30, the bullish signal will go “stale” and revert to neutral. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls back below it.

For the week ended September 8, 2017, four CI Market Dashboard indicators are bullish, five indicators are neutral and none are bearish.

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8/25/2017

Author: Wayne A. Thorp, CFA

Weekly Computerized Investing Market Dashboard Summary

Please note that there will not be an update to the Market Dashboard the weekend of September 2 because of the Labor Day holiday. From everyone at CI and AAII, have a happy and safe holiday weekend.

This week, two of the CI Market Dashboard Indicators went “stale” and reverted to neutral from bearish. However, none of the indicators triggered confirming bearish or bullish signals.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) climbed 0.82% this week to close at $122.34. For the 42nd consecutive week, dating back to November of last year, the ETF closed above its 100-day moving average. Therefore, this indicator remains BULLISH. The 100-day moving average of IYY's closing price ended the week at 120.75. The spread between the IYY closing price and the moving average widened to 1.12% from +0.49% at the end of last week. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain BULLISH. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week clearly below its signal line. As a result, this indicator remains BEARISH for the fourth week in a row. The MACD of IYY stands at -0.204 while the signal line is at -0.076. As long as the MACD ends the week clearly below its signal line, this indicator will remain BEARISH. If the MACD was to end the week with clear separation with its signal line to the upside, this indicator would trigger a new bullish signal. If the MACD was to end the week basically in line with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 47.86, up from 39.53 a week ago. This indicator has gone six months without generating a confirming bearish signal. Therefore, the bearish signal has gone stale and this indicator reverts to NEUTRAL. This indicator would trigger a bearish signal if its reading rose above the 75% bearish threshold and then fell back below it. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 58.89, a tick up from last week’s reading of 58.85. This indicator has gone six months without generating a confirming bearish signal. Therefore, its signal has gone stale and reverts to NEUTRAL. This indicator would trigger a new bearish signal if the indicator rises above the 70% bearish threshold and then starts to decline. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • Both of the component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator ended this week flashing bearish signals. For the fourth straight week, this composite indicator is BEARISH. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. $NASI ended this week below its moving average. This is a BEARISH signal for this component indicator. $NASI ended the week at -307.33 versus the moving average at -295.32. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD remained below its signal line. This is a BEARISH signal for this component indicator. The MACD of $NASI is 128.268 while the signal line is -103.896. This composite indicator will remain BEARISH as long as the component indicators are both flashing bearish signals. This composite indicator would trigger a new bullish signal if the two component indicators both were both flashing bullish signals. This composite indicator would trigger a new neutral signal if the two component indicators were not in agreement.
  • AAII Investor Bullish Sentiment fell 6.1 percentage points this week to 28.1%. This is its lowest reading in 12 weeks. However, this indicator remains BULLISH for the 14th consecutive week. This indicator will remain BULLISH until November 30, 2017. If the indicator triggers a confirming bullish signal by falling below 25% and then rising above it, the “stale date” would be pushed back six months from the date of the confirming bullish signal. If there has not been a confirming bullish signal by November 30, the bullish signal will go “stale” and revert to neutral. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls back below it.

For the week ended August 25, 2017, two CI Market Dashboard indicators are bullish, five indicators are neutral and two are bearish.

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8/18/2017

Author: Wayne A. Thorp, CFA

Weekly Computerized Investing Market Dashboard Summary

This week, none of the CI Market Dashboard Indicators saw a change in their signal. In addition, none of the indicators triggered confirming bearish or bullish signals.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) fell 0.56% this week to close at $121.34. However, for the 41st consecutive week, dating back to November of last year, the ETF closed above its 100-day moving average. Therefore, this indicator remains BULLISH. The 100-day moving average of IYY's closing price ended the week at 120.75. The spread between the IYY closing price and the moving average narrowed to +0.49% from +1.3% a week ago. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain BULLISH. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week clearly below its signal line. As a result, this indicator remains BEARISH for the third week in a row. The MACD of IYY stands at -0.116 while the signal line is at +0.173. As long as the MACD ends the week clearly below its signal line, this indicator will remain BEARISH. If the MACD was to end the week with clear separation with its signal line to the upside, this indicator would trigger a new bullish signal. If the MACD was to end the week basically in line with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 39.53, down from 40.88 a week ago. This continues to be the lowest week-ending reading since November. The signal for this indicator will remain BEARISH until August 25, 2017. If there is not a confirming bearish signal before then, the signal will go “stale” on that date and revert to neutral. A confirming bearish signal would occur if the indicator was to rise above the 75% level and fall back below it. This would push the “stale date” back six months from the date of the confirming bearish signal. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 58.85, down from last week’s reading of 60.759. This is the lowest reading for this indicator since November. This indicator will remain BEARISH until August 25, 2017, on which date the signal with go “stale” and revert to neutral. The “stale date” would be pushed back if a confirming bearish signal was generated before that date. This would happen if the indicator rises above the 70% bearish threshold and then starts to decline. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • Both of the component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator ended this week flashing bearish signals. For the third straight week, this composite indicator is BEARISH. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. $NASI ended this week below its moving average. This is a BEARISH signal for this component indicator. $NASI ended the week at -257.5 versus the moving average at -182.14. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD remained below its signal line. This is a BEARISH signal for this component indicator. The MACD of $NASI is -102.129 while the signal line is -61.394. This composite indicator will remain BEARISH as long as the component indicators are both flashing bearish signals. This composite indicator would trigger a new bullish signal if the two component indicators both were both flashing bullish signals. This composite indicator would trigger a new neutral signal if the two component indicators were not in agreement.
  • AAII Investor Bullish Sentiment ticked upward 0.5 percentage points this week to 34.2%. This indicator will remain BULLISH until November 30, 2017. If the indicator triggers a confirming bullish signal by falling below 25% and then rising above it, the “stale date” would be pushed back six months from the date of the confirming bullish signal. If there has not been a confirming bullish signal by November 30, the bullish signal will go “stale” and revert to neutral. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls back below it.

For the week ended August 18, 2017, two CI Market Dashboard indicators are bullish, three indicators are neutral and four are bearish.

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8/11/2017

Author: Wayne A. Thorp, CFA

Weekly Computerized Investing Market Dashboard Summary

This week, none of the CI Market Dashboard Indicators saw a change in their signal. In addition, none of the indicators triggered confirming bearish or bullish signals.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) fell 1.4% this week to close at $122.02. For the 40th week in a row, dating back to November of last year, the ETF closed above its 100-day moving average. Therefore, this indicator remains BULLISH. The 100-day moving average of IYY's closing price ended the week at 120.47. The spread between the IYY closing price and the moving average narrowed to +1.3% from +3.0% a week ago. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain BULLISH. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week clearly below its signal line. As a result, this indicator remains BEARISH for the second week in a row. The MACD of IYY stands at +0.16 while the signal line is at +0.439. As long as the MACD ends the week clearly below its signal line, this indicator will remain BEARISH. If the MACD was to end the week with clear separation with its signal line to the upside, this indicator would trigger a new bullish signal. If the MACD was to end the week basically in line with its signal line, this indicator would trigger a new neutral signal.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended this week at -97, down from +95 at the end of last week. This is the lowest reading since February 2016. However, this indicator remains NEUTRAL. This indicator will trigger a new bullish signal if the reading was to fall below the -750 level from positive territory and start to recover, or if the reading experiences a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound. The 10-day peak-to-trough spread for this indicator is currently 243 (146 – -97).
  • The percentage of NYSE stocks reaching a new 52-week high this week slid to 8.29% this week from last week’s reading of 12.42%. However, the indicator remains NEUTRAL since the reading did not fall from above the 25% bearish threshold this week. There were 561 NYSE stocks posting gains this week compared to 1,522 a week ago. This is the lowest number of weekly winners since January 2016. In contrast, 2,527 stocks ended the week with a loss, which is the highest number since January 2016. There were 259 NYSE stocks that closed the week at a new 52-week high, down from 388 the week before. By means of comparison, 231 NYSE stocks closed this week at a new 52-week low, the highest reading in 38 weeks. This indicator remains NEUTRAL. The percentage of NYSE stocks reaching new highs needs to rise above the 25% bearish threshold and then fall below it to trigger a bearish signal. The last time the reading was above the 25% bearish threshold was May 24, 2013. The next week the reading fell below 25%, triggering a bearish signal. The indicator reverted to neutral six months later, on November 21, 2013, having failed to generate another confirming bearish signal. There is no bullish threshold for the lower range of this indicator.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 40.88, down from 63.19 at the close of last week. This is the lowest reading since November. The signal for this indicator will remain BEARISH until August 25, 2017. If there is not a confirming bearish signal before then, the signal will go “stale” on that date and revert to neutral. A confirming bearish signal would occur if the indicator was to rise above the 75% level and fall back below it. This would push the “stale date” back six months from the date of the confirming bearish signal. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 60.75, down from last week’s reading of 63.53. This is the lowest reading for this indicator since November. This indicator will remain BEARISH until August 25, 2017, on which date the signal with go “stale” and revert to neutral. The “stale date” would be pushed back if a confirming bearish signal was generated before that date. This would happen if the indicator rises above the 70% bearish threshold and then starts to decline. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • Both of the component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator ended this week flashing bearish signals. For the second straight week, this composite indicator is BEARISH. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. $NASI ended this week below its moving average. This is a BEARISH signal for this component indicator. $NASI ended the week at -95.87 versus the moving average at -0.52. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD remained below its signal line. This is also a BEARISH signal for this component indicator. The MACD of $NASI is -47.071 while the signal line is -11.755. This composite indicator will remain BEARISH as long as the component indicators are both flashing bearish signals. This composite indicator would trigger a new bullish signal if the two component indicators both were both flashing bullish signals. This composite indicator would trigger a new neutral signal if the two component indicators were not in agreement.
  • AAII Investor Bullish Sentiment fell 2.4 percentage points this week to 33.7%. This indicator remains BULLISH for the 12th consecutive week. This indicator will remain BULLISH until November 30, 2017. If the indicator triggers a confirming bullish signal by falling below 25% and then rising above it, the “stale date” would be pushed back six months from the date of the confirming bullish signal. If there has not been a confirming bullish signal by November 30, the bullish signal will go “stale” and revert to neutral. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls back below it.

For the week ended August 11, 2017, two CI Market Dashboard indicators are bullish, three indicators are neutral and four are bearish.

 

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8/4/2017

Author: Wayne A. Thorp, CFA

Weekly Computerized Investing Market Dashboard Summary

This week, two of the CI Market Dashboard Indicators triggered new bearish signals, one switching from bullish and the other from neutral.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) added 0.13% this week to close at $123.81. This is 0.24% below the all-time close set on July 25. For the 39th week in a row, dating back to November of last year, the ETF closed above its 100-day moving average. Therefore, this indicator remains BULLISH. The 100-day moving average of IYY's closing price ended the week at 120.22. The spread between the IYY closing price and the moving average stands at +3.0%. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain BULLISH. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • Earlier this week, the MACD of IYY crossed below its signal line and remained there at week’s end. This bearish crossover triggered a new BEARISH signal for this indicator. The MACD of IYY stands at +0.559 while the signal line is at +0.617. As long as the MACD ends the week clearly below its signal line, this indicator will remain BEARISH. If the MACD was to end the week with clear separation with its signal line to the upside, this indicator would trigger a new bullish signal. If the MACD was to end the week basically in line with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 63.19, down from 70.41 at the close of last week. The signal for this indicator will remain BEARISH until August 25, 2017. If there is not a confirming bearish signal before then, the signal will go “stale” on that date and revert to neutral. A confirming bearish signal would occur if the indicator was to rise above the 75% level and fall back below it. This would push the “stale date” back six months from the date of the confirming bearish signal. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 63.53, down from 65.894 at the close of last week. This indicator will remain BEARISH until August 25, 2017, on which date the signal with go “stale” and revert to neutral. The “stale date” would be pushed back if a confirming bearish signal was generated before that date. This would happen if the indicator rises above the 70% bearish threshold and then starts to decline. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • Both of the component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator ended this week flashing bearish signals. Therefore, this indicator triggered a new BEARISH signal, switching from neutral. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. $NASI ended this week below its moving average. This is a BEARISH signal for this component indicator. $NASI ended the week at +120.26 versus the moving average at +168.26. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD moved below its signal line and remained there at week’s end. This bearish crossover triggered a new BEARISH signal for this component indicator. The MACD of $NASI is +6.477 while the signal line is +20.009. This composite indicator will remain BEARISH as long as the component indicators are both flashing bearish signals. This composite indicator would trigger a new bullish signal if the two component indicators both were both flashing bullish signals. This composite indicator would trigger a new neutral signal if the two component indicators were not in agreement.
  • AAII Investor Bullish Sentiment climbed 1.7 percentage points this week to 36.1%. This is the highest reading in 13 weeks. This indicator will remain BULLISH until November 30. If the indicator triggers a confirming bullish signal by falling below 25% and then rising above it, the “stale date” would be pushed back six months from the date of the confirming bullish signal. If there has not been a confirming bullish signal by November 30, the bullish signal will go “stale” and revert to neutral. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls back below it.

For the week ended August 4, 2017, two CI Market Dashboard indicators are bullish, three indicators are neutral and four are bearish.

 

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7/21/2017

Author: Wayne A. Thorp, CFA

Due to technical issues, there will not be an update to the CI Market Dashboard the weekend of July 22. The next weekend update will take place on August 5-6.

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7/14/2017

Author: Wayne A. Thorp, CFA

Weekly Market Summary

U.S. stocks awoke from their mid-Summer slumber this week. The Dow Jones industrial average hit multiple record highs this week and the S&P 500 hit another new all-time close, too. Meanwhile, tech stocks posted a strong week, too, as the Nasdaq Composite enjoyed its best week since December. Stocks received a boost from weak inflation and retail sales data, which coupled with Fed Chair Janet Yellen’s recently dovish congressional testimony, lowered expectations for additional interest rate increases this year. Early Friday, the latest reading of the U.S. consumer-price index, showed inflation was flat in June, according to the Labor Department. In addition, retail sales decreased in June from the prior month, the Commerce Department said Friday. All was not rosy with stocks, however, as the market also had to digest disappointing earnings from some of the nation’s biggest banks as earnings season started warming up.

Major Indexes

The Dow Jones Industrial Average (DJIA) ended the week with back-to-back record closings. For the week, the blue-chip index climbed 1.03% to 21,637.74. The index broke through the 21,550 level, which had been offering resistance for the last couple of weeks. It is too early to tell if that resistance turns into support, however. To the downside, there may be initial support around 21,300, followed by the 50-day moving average at 21,200.25 and round-number support at 21,000.

The S&P 500 Index (SPX) also closed the week at a new all-time high close. This was after the index traded below its 50-day moving average on Tuesday. For the week, the large-cap index added 1.4% and closed at 2,459.27. The index also broke through short-term resistance around 2,445. We look to the moving average, currently at 2,419.55, for initial support, followed by the 2,410 level, which marks the lows of two weeks ago.

Breadth turned sharply positive this week, as 10 of the 11 S&P sectors posted gains. After last week’s strong gains, financials suffered through some disappointing earnings results from banks. For the week, Financials (XLF) slid 0.5%. Technology (XLT) roared back this week, adding 3.4%. Materials (XLB: +2.1%) and Energy (XLE: +2.2%) also registered strong weekly gains.

The broad market Wilshire 5000 (W5000) gained 1.4% this week to close at 25,569.93. Friday, it too posted a new all-time high close while breaking above near-term resistance around 25,450. We will wait to see if that turns into support moving forward. To the downside, there is also the 50-day moving average at 25,156.80 followed by round-number support at 25,000.

The tech-heavy Nasdaq Composite (COMP) ended its best week of the year up 2.6% at 6,312.47. The index has now also posted six straight winning sessions. For all the talk recently about the “slump” in technology, however, the Nasdaq is now only 0.15% below its record high close set on June 8. The index moved above its 50-day moving average this week as well. To the downside, we look for initial support around 6,200, which would also fill in Wednesday’s price gap. Below that is the 50-day moving average at 6,182.87, although we question its viability.

The Russell 2000 (RUT) index of smaller stocks added 0.9% this week to close at 1,428.82. This, too, was a new record close. It is too early to tell if the index has moved out of its trading channel of the last few weeks, but if so we look for initial support around 1,425. Below that it round-number support at 1,400 along with the 50-day moving average at 1,400.99.

The CBOE Volatility Index (VIX) dropped to its lowest level since 1993, offsetting the widening discussion about rising volatility. For the week, Wall Street’s “fear gauge” fell 15.0% to 9.51.

Computerized Investing Market Dashboard Indicators

This week, one of the CI Market Dashboard Indicators triggered a new bullish signal, switching from bearish, while another triggered a new neutral signal, switching from bearish. However, none of the Dashboard indicators triggered confirming bearish or bullish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) climbed 1.4% this week to close at $123.09. For the 36th week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at 119.37. The spread between the IYY closing price and the moving average stands at +31.%, up from +1.9% a week ago. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week clearly above its signal line. After crossing above its signal line on Friday, MACD of IYY remained there at week’s end. Therefore, this indicator triggered a new bullish signal. The MACD of IYY stands at +0.37 while the signal line is at +0.294. As long as the MACD ends the week clearly above its signal line, this indicator will remain bullish. If the MACD was to end the week with clear separation with its signal line to the downside, this indicator would trigger a new bearish signal. If the MACD was to end the week basically in line with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 69.96, up from 56.22 at the close of last week. The signal for this indicator will remain bearish until August 25, 2017. If there is not a confirming bearish signal before then, the signal will go “stale” on that date and revert to neutral. A confirming bearish signal would occur if the indicator was to rise above the 75% level and fall back below it. This would push the “stale date” back six months from the date of the confirming bearish signal. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 65.82, up from 64.93 at the close of last week. This indicator will remain bearish until August 25, 2017, on which date the signal with go “stale” and revert to neutral. The “stale date” would be pushed back if a confirming bearish signal was generated before that date. This would happen if the indicator rises above the 70% bearish threshold and then starts to decline. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • The component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator ended this week flashing conflicting signals. Therefore, this indicator triggered a new neutral signal, switching from bearish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI moved above its moving average and remained there at week’s end. This bullish crossover triggered a new bullish signal for this component indicator. $NASI ended the week at +165.05 versus the moving average at +147.91. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. Once again, the MACD line ended the week below its signal line. Therefore, this composite indicator remains bearish. The MACD of $NASI is +5.732 while the signal line is +7.531. This composite indicator will remain neutral as long as the component indicators are not in agreement. This composite indicator would trigger a new bullish signal if the two component indicators both were both flashing bullish signals. This composite indicator would trigger a new bearish signal if the two component indicators both were both flashing bearish signals.
  • AAII Investor Bullish Sentiment fell 1.3 percentage points this week to 28.2%. This is the lowest reading in six weeks. This indicator will remain bullish until November 30. If the indicator triggers a confirming bullish signal by falling below 25% and then rising above it, the “stale date” would be pushed back six months from the date of the confirming bullish signal. If there has not been a confirming bullish signal by November 30, the bullish signal will go “stale” and revert to neutral. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls back below it.

For the week ended July 14, 2017, three CI Market Dashboard indicators are bullish, four indicators are neutral and two are bearish.

 

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7/7/2017

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The U.S. stock market was relatively flat over this holiday-shortened week as gains in financials and a slight rebound in tech stocks were offset by losses in energy stocks as the price of oil continued to decline. Bank stocks have been on the rise over the last couple of weeks since the firms passed the Federal Reserve’s stress tests and some announced higher dividends and increased share buybacks. Financials also were lifted by Labor Department data showing U.S. hiring picked up more than expected in June, although wage growth was flat.

Major Indexes

The Dow Jones Industrial Average (DJIA) advanced 0.3% this week to close at 21,414.34. Over the last 20 trading days, the blue-chip index is evenly split between winning and losing days. To the downside, the first meaning support lies at the 50-day moving average (21,144.30), followed by round-number support at 21,000.

The S&P 500 Index (SPX) gained 0.1% this week to 2,425.18. The index has also seen 10 up days and 10 down days over the last 20 trading sessions. On Thursday of this week, the large-cap index closed below its 50-day moving average but moved back above it by the end of Friday’s trading. We still look to the moving average, currently at 2,414.29, as near-term support. Below that is round-number support at 2,400.

Breadth in the market tilted negative this week, as only four of the 10 S&P Sector SPDRs posted gains. As we mentioned previously, financials (XLF) enjoyed a strong week, posting a 1.5% gain. Real estate (XLRE) was the weakest sector this week, shedding 1.52%, followed by energy (XLE) and its 1.4% decline. Technology (XLK) added 0.53% for the week.

The broad market Wilshire 5000 (W5000) ticked downward 0.04% this week to close at 25,219.16. On Thursday, the index closed below its 50-day moving average, only to move back above it and remain there on Friday. We still look to the moving average (25,110.56) for near-term support. Below that is round-number support at 25,000.

The tech-heavy Nasdaq Composite (COMP) climbed 0.2% this week to 6,153.08. Last week the index moved below its 50-day moving average and has remained there. We view the moving average, currently at 6,165.63, as a near-term speedbump. The index also tested round-number support at 6,100, closing below it on Thursday. However, the index moved back above it on Friday so we still view it as near-term support.

The Russell 2000 (RUT) index of smaller stocks clawed out a 0.03% gain this week to close at 1,415.84. The 1,400 level was tested but held on Thursday, as was the 50-day moving average at 1,399.28. In the near-term, we look to these levels as support.

The CBOE Volatility Index (VIX) eked out a 0.09% gain this week to 11.19.

Computerized Investing Market Dashboard Indicators

This week, one of the CI Market Dashboard Indicators triggered a new bearish signal, switching from neutral. However, none of the Dashboard indicators triggered confirming bearish or bullish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) climbed 0.2% this week to close at $121.40. For the 35th week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at 119.12. The spread between the IYY closing price and the moving average stands at +1.9%. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week clearly below its signal line. Therefore, this indicator remains bearish for the fourth week in a row. The MACD of IYY stands at +0.189 while the signal line is at +0.349. As long as the MACD ends the week clearly below its signal line, this indicator will remain bearish. If the MACD was to end the week with clear separation with its signal line to the upside, this indicator would trigger a new bullish signal. If the MACD was to end the week basically in line with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 56.22, down from 60.41 at the close of last week. The signal for this indicator will remain bearish until August 25, 2017. If there is not a confirming bearish signal before then, the signal will go “stale” on that date and revert to neutral. A confirming bearish signal would occur if the indicator were to rise above the 75% level and fall back below it. This would push the “stale date” back six months from the date of the confirming bearish signal. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 64.93, up from 63.88 at the close of last week. This indicator will remain bearish until August 25, 2017, on which date the signal with go “stale” and revert to neutral. The “stale date” would be pushed back if a confirming bearish signal was generated before that date. This would happen if the indicator rises above the 70% bearish threshold and then starts to decline. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • The component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator ended this week flashing bearish signals. For the third week in a row, this indicator remains bearish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. Once again, $NASI ended the week below the moving average, which is bearish for this component indicator. $NASI ended the week at +139.23 versus the moving average at +148.44. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. Over last week’s break, the MACD line moved above the signal line, which is bullish. However, this week it again fell below it and remained there at week’s end. Therefore, this composite indicator remains bearish. The MACD of $NASI is +9.564 while the signal line is +12.662. This composite indicator will remain bearish as long as the component indicators are both flashing bearish signals. This composite indicator would trigger a new bullish signal if the two component indicators both were both flashing bullish signals. This indicator would trigger a new neutral signal if the two component indicators were not in agreement.
  • AAII Investor Bullish Sentiment ticked downward by 0.1 percentage points this week to 29.6%. This indicator will remain bullish until November 30. If the indicator triggers a confirming bullish signal by falling below 25% and then rising above it, the “stale date” would be pushed back six months from the date of the confirming bullish signal. If there has not been a confirming bullish signal by November 30, the bullish signal will go “stale” and revert to neutral. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls back below it.

For the week ended July 7, 2017, two CI Market Dashboard indicators are bullish, three indicators are neutral and four are bearish.

 

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7/7/2017

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The U.S. stock market was relatively flat over this holiday-shortened week as gains in financials and a slight rebound in tech stocks were offset by losses in energy stocks as the price of oil continued to decline. Bank stocks have been on the rise over the last couple of weeks since the firms passed the Federal Reserve’s stress tests and some announced higher dividends and increased share buybacks. Financials also were lifted by Labor Department data showing U.S. hiring picked up more than expected in June, although wage growth was flat.

Major Indexes

The Dow Jones Industrial Average (DJIA) advanced 0.3% this week to close at 21,414.34. Over the last 20 trading days, the blue-chip index is evenly split between winning and losing days. To the downside, the first meaning support lies at the 50-day moving average (21,144.30), followed by round-number support at 21,000.

The S&P 500 Index (SPX) gained 0.1% this week to 2,425.18. The index has also seen 10 up days and 10 down days over the last 20 trading sessions. On Thursday of this week, the large-cap index closed below its 50-day moving average but moved back above it by the end of Friday’s trading. We still look to the moving average, currently at 2,414.29, as near-term support. Below that is round-number support at 2,400.

Breadth in the market tilted negative this week, as only four of the 10 S&P Sector SPDRs posted gains. As we mentioned previously, financials (XLF) enjoyed a strong week, posting a 1.5% gain. Real estate (XLRE) was the weakest sector this week, shedding 1.52%, followed by energy (XLE) and its 1.4% decline. Technology (XLK) added 0.53% for the week.

The broad market Wilshire 5000 (W5000) ticked downward 0.04% this week to close at 25,219.16. On Thursday, the index closed below its 50-day moving average, only to move back above it and remain there on Friday. We still look to the moving average (25,110.56) for near-term support. Below that is round-number support at 25,000.

The tech-heavy Nasdaq Composite (COMP) climbed 0.2% this week to 6,153.08. Last week the index moved below its 50-day moving average and has remained there. We view the moving average, currently at 6,165.63, as a near-term speedbump. The index also tested round-number support at 6,100, closing below it on Thursday. However, the index moved back above it on Friday so we still view it as near-term support.

The Russell 2000 (RUT) index of smaller stocks clawed out a 0.03% gain this week to close at 1,415.84. The 1,400 level was tested but held on Thursday, as was the 50-day moving average at 1,399.28. In the near-term, we look to these levels as support.

The CBOE Volatility Index (VIX) eked out a 0.09% gain this week to 11.19.

Computerized Investing Market Dashboard Indicators

This week, none of the CI Market Dashboard Indicators triggered a new signal. In addition, none of the Dashboard indicators triggered confirming bearish or bullish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) climbed 0.2% this week to close at $121.40. For the 35th week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at 119.12. The spread between the IYY closing price and the moving average stands at +1.9%. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week clearly below its signal line. Therefore, this indicator remains bearish for the fourth week in a row. The MACD of IYY stands at +0.189 while the signal line is at +0.349. As long as the MACD ends the week clearly below its signal line, this indicator will remain bearish. If the MACD was to end the week with clear separation with its signal line to the upside, this indicator would trigger a new bullish signal. If the MACD was to end the week basically in line with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 56.22, down from 60.41 at the close of last week. The signal for this indicator will remain bearish until August 25, 2017. If there is not a confirming bearish signal before then, the signal will go “stale” on that date and revert to neutral. A confirming bearish signal would occur if the indicator were to rise above the 75% level and fall back below it. This would push the “stale date” back six months from the date of the confirming bearish signal. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 64.93, up from 63.88 at the close of last week. This indicator will remain bearish until August 25, 2017, on which date the signal with go “stale” and revert to neutral. The “stale date” would be pushed back if a confirming bearish signal was generated before that date. This would happen if the indicator rises above the 70% bearish threshold and then starts to decline. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • The component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator ended this week flashing bearish signals. For the third week in a row, this indicator remains bearish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. Once again, $NASI ended the week below the moving average, which is bearish for this component indicator. $NASI ended the week at +139.23 versus the moving average at +148.44. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. Over last week’s break, the MACD line moved above the signal line, which is bullish. However, this week it again fell below it and remained there at week’s end. Therefore, this composite indicator remains bearish. The MACD of $NASI is +9.564 while the signal line is +12.662. This composite indicator will remain bearish as long as the component indicators are both flashing bearish signals. This composite indicator would trigger a new bullish signal if the two component indicators both were both flashing bullish signals. This indicator would trigger a new neutral signal if the two component indicators were not in agreement.
  • AAII Investor Bullish Sentiment ticked downward by 0.1 percentage points this week to 29.6%. This indicator will remain bullish until November 30. If the indicator triggers a confirming bullish signal by falling below 25% and then rising above it, the “stale date” would be pushed back six months from the date of the confirming bullish signal. If there has not been a confirming bullish signal by November 30, the bullish signal will go “stale” and revert to neutral. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls back below it.

For the week ended July 7, 2017, two CI Market Dashboard indicators are bullish, three indicators are neutral and four are bearish.

 

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6/23/2017

Author: Wayne A. Thorp, CFA
There will not be a Market Dashboard update next weekend. On behalf of everyone at AAII, have a safe and enjoyable Fourth of July holiday.

Weekly Market Summary

A strong week by health-care stocks boosted the major U.S. indexes even as energy continued its downward slide. Shares of pharmaceutical companies and biotechnology firms posted gains this week, following some encouraging data on drug development. Health-care companies joined the climb, including Thursday when Senate Republicans unveiled their plans to overhaul the Affordable Care Act.

Energy companies and equipment makers fell in recent days as U.S.-traded crude oil tumbled since lower oil prices can hurt their profit margins. Investors are watching the energy market closely since it has been critical for the earnings recovery in the U.S. The sector is expected to account for nearly half of the S&P 500’s earnings growth in the second quarter, according to FactSet. U.S.-traded crude oil declined 4.4% for the week and entered a bear market, having fallen more than 20% from a recent high in February.

Technology stocks kicked off the week by posting their biggest gains of the year on Monday. This, in turn, boosted the Dow Jones industrial average to it biggest daily gain in a month and a new record close. The S&P 500 also notched a new all-time high as it recorded its biggest gain in almost two months. The Nasdaq Composite turned in its biggest one-day advance since November 7.

U.S. stock indexes backtracked Tuesday as oil prices fell to their lowest levels since September, pressuring the shares of energy companies. Energy stocks in the S&P 500 fell 1.2%, adding to the losses of the worst-performing sector of the year. The fall came on the heels of fresh worries of an oversupply of oil.

The slide in energy stocks continued Wednesday, which pulled the Dow Jones industrial average and S&P 500 lower. However, gains in health-related companies lifted the Nasdaq to a daily win. Health-care stocks in the S&P 500 rose 1.2% while the Nasdaq added 0.7%.

Health-care stocks posted strong gains on Thursday after Senate Republicans unveiled their plans to overhaul the Affordable Care Act. The Nasdaq Biotechnology Index posted its highest close since January 2016. The rest of the market was muted on Thursday, as the Dow Jones industrial average and S&P 500 both fell less than 0.1%.

Friday once again saw U.S. shares move in a narrow range. The S&P 500 index rose 0.2%, while the Nasdaq Composite added 0.5%. The Dow Jones industrial average ticked downward by 0.1% for the day.

Major Indexes

The Dow Jones Industrial Average (DJIA) eked out a 0.05% gain for the week to close at 21,394.76. After hitting a record close on Monday, the blue-chip index fell each of the next four trading sessions. The index filled in the gap it created at Monday’s open so we wait to see if that turns into support. Below that is round-number support at 21,000 as well as the 50-day moving average at 21,011,83.

The S&P 500 Index (SPX) ended the week up 0.2% to 2,438.30. The large-cap index posted bookend gains this week, with three losing sessions in between. The index broke out of its trading range on Monday but fell back into it. The range has tightened recently though, as support seems to be developing around 2,435. Below that is round-number support at 2,400 and the 50-day moving average at 2,401.78.

Once again, breadth in the market was decidedly negative this week, with only three of the 10 S&P Sector SPDRs posting gains, according to SectorSPDR.com. As we mentioned previously, health care (XLV) enjoyed a strong week, posting a 3.6% gain. Technology (XLK) also bucked the broader trend, adding 1.9%. Energy (XLE) dropped 2.9% for the week, while financials (XLF) and Utilities (XLU) also fell 1.7%.

The broad market Wilshire 5000 (W5000) gained 0.3% this week to 25,349.12. On Monday, the index posted a new all-time close but retreated from that level on Tuesday. The index briefly broke through resistance at 25,400 but we still view that as a near-term roadblock. Minor support may be developing around 25,276, but more meaningful support should exist at 25,000 and at the 50-day moving average (24,992.83).

The tech-heavy Nasdaq Composite (COMP) climbed 1.8% this week to 6,265.25, snapping its two-week losing streak. To the downside, we look to the 50-day moving average at 6,122.03 for initial support as well as round-number support at 6,100, which held during the recent pullback.

The Russell 2000 (RUT) index of smaller stocks gained 0.6% this week to close at 1,414.78. The index closed at 1,399.25 on Thursday but we still look to the 1,400 level for initial support. Below that is the 50-day moving average at 1,393.03.

The CBOE Volatility Index (VIX) fell 4.4% this week to 10.02.

Computerized Investing Market Dashboard Indicators

This week, one of the CI Market Dashboard Indicators triggered a new bearish signal, switching from neutral. However, none of the Dashboard indicators triggered confirming bearish or bullish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) climbed 0.4% this week to close at $122.44. For the 33rd week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at 118.97, up from 118.57 a week ago. The spread between the IYY closing price and the moving average stands at +2.9%, unchanged from last week. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week clearly below its signal line. Therefore, this indicator remains bearish for the second week in a row. The MACD of IYY stands at +0.586 while the signal line is at +0.658. As long as the MACD ends the week clearly below its signal line, this indicator will remain bearish. If the MACD was to end the week with clear separation with its signal line to the upside, this indicator would trigger a new bullish signal. If the MACD was to end the week basically in line with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 57.44, down from 61.41 at the close of last week. The signal for this indicator will remain bearish until August 25, 2017. If there is not a confirming bearish signal before then, the signal will go “stale” on that date and revert to neutral. A confirming bearish signal would occur if the indicator were to rise above the 75% level and fall back below it. This would push the “stale date” back six months from the date of the confirming bearish signal. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 63.53, slightly lower than last week’s reading of 63.98. This indicator will remain bearish until August 25, 2017, on which date the signal with go “stale” and revert to neutral. The “stale date” would be pushed back if a confirming bearish signal was generated before that date. This would happen if the indicator rises above the 70% bearish threshold and then starts to decline. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • The component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator ended this week flashing bearish signals. This means that this indicator has triggered a new bearish signal, switching from neutral. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. Once again, $NASI ended the week below the moving average, which is bearish for this component indicator. $NASI ended the week at +132.57 versus the moving average at +138.36. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD line moved below the signal line and remained there at week’s end. This bearish crossover triggered a new bearish signal for this component indicator. The MACD of $NASI is +2614.59 while the signal line is +19.765. This composite indicator will remain bearish as long as the component indicators are both flashing bearish signals. This composite indicator would trigger a new bullish signal if the two component indicators both were both flashing bullish signals. This indicator would trigger a new neutral signal if the two component indicators were not in agreement.
  • AAII Investor Bullish Sentiment ticked upward by 0.4 percentage points this week to 32.7%. This indicator will remain bullish until November 30. If the indicator triggers a confirming bullish signal by falling below 25% and then rising above it, the “stale date” would be pushed back six months from the date of the confirming bullish signal. If there has not been a confirming bullish signal by November 30, the bullish signal will go “stale” and revert to neutral. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls back below it.

For the week ended June 23, 2017, two CI Market Dashboard indicators are bullish, three indicators are neutral and four are bearish.

 

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6/16/2017

Author: Wayne A. Thorp, CFA

Weekly Market Summary

U.S. stocks struggled to find direction this week, with some of the major indexes moving in a tight range while still eking out new all-time highs. Meanwhile, technology suffered through its worst slump in several months and consumer staples companies were rocked at the end of the week by the surprising news that Amazon.com (AMZN) was buying Whole Foods (WFM).

Monday marked the worst two-day stretch of 2017 for the Nasdaq Composite. The tech index closed with a 2.3% decline from last Friday’s and Monday’s trading. Some investors and traders are wondering if the run in the sector, which has outpaced the broader market so far this year, is ripe for a correction.

Tuesday had the opportunity to be a volatile day in the market, as Attorney General Jeff Sessions testified before Congress about alleged Russian meddling in the 2016 presidential election. However, stocks seemingly shrugged off Sessions’ vehement denials. The brief tech slump ended on Tuesday, as the Nasdaq Composite outpaced its compatriots by adding 0.7%. The same day, the Dow notched a new record high and the S&P 500 closed at a new record close.

On Wednesday, all eyes turned to the Federal Open Market Committee (FOMC), which as expected lifted interest rates for the second time this year. In a post-meeting press conference, Fed Chair Janet Yellen said the economy is on the path to achieving the current 2% inflation target. The Fed also signaled its intention to raise interest rates one more time this year. In response, the Dow hit a record high for the second day in a row. However, energy stocks plummeted along with crude oil futures, which in turn weighed on the S&P 500. An afternoon decline in tech stocks dragged the Nasdaq Composite into the red for the third session in four.

Thursday saw tech stocks weigh on the U.S. market. A sell-off in “FAANG” stocks (Facebook (FB), Amazon.com, Apple (AAPL), Netflix (NFLX) and Google (GOOGL) [Alphabet]) dragged the major indexes lower. Energy stocks also declined as crude oil futures fell to a seven-month low.

On Friday, the market awoke to news that Amazon.com was buying Whole Foods for $13.7 billion. This sent consumer staples sector reeling. Although Amazon.com shares rose 2.7% in the news, a rarity for an acquiring company, the Nasdaq Composite fell again, notching its first two-week losing streak since the November elections. After trading in a narrow range all session, the Dow Jones industrial average managed to notch a record closing high and its fourth straight weekly gain. The sell-off in consumer staples pressured the S&P 500, but it managed to end the day with a win.

Major Indexes

The Dow Jones Industrial Average (DJIA) added 0.5% this week to close at 21,384.28, a new record close. To the downside, we are still waiting to see if the 21,000 level offers round-number support. Below that is the 50-day moving average at 20,932.27 and additional round-number support at 20,000.

The S&P 500 Index (SPX) ticked upward by 0.06% and ended the week at 2,433.15. The index had traded between 2,415 and 2,445 for the last two weeks. We wait to see whether a breakout comes to the upside or downside. Currently, the 2,415 mark is offering support, while roughly the 2,445 level is short-term resistance. We look to the 2,400 mark for additional support and below that is the 50-day moving average at 2,393.18.

Once again, breadth in the market was decidedly negative this week, with only four of the 10 S&P Sector SPDRs posting gains. Industrials (XLI) and Utilities (XLU) were the strongest sectors this week, gaining 1.1% and 0.8%, respectively. Technology (XLK) was the weakest sector, shedding 1.4%, followed closely by consumer staples (XLP), which fell 1.3%.

The broad market Wilshire 5000 (W5000) slipped 0.11% this week to 25,266.61. It appears that near-term resistance is developing around the 25,400 mark. We look for initial round-number support at 25,000 and below that is the 50-day moving average at 24,912.79.

The tech-heavy Nasdaq Composite (COMP) fell 0.9% this week to 6,151.76, its first two-week losing streak since the November election. The index fell through support at 6,200, but once again the 6,100 support level held. Below that is the 50-day moving average at 6,085.58 and round-number support at 6,000.

The Russell 2000 (RUT) index of smaller stocks lost 1.1% this week to close at 1,406.73. Support at 1,400 help, however. Below that is the 50-day moving average at 1,388.88.

The CBOE Volatility Index (VIX) lost 3% this week and settled at 10.38.

Computerized Investing Market Dashboard Indicators

This week, one of the CI Market Dashboard Indicators triggered a new bearish signal, switching from bullish, while another triggered a new neutral, switching from bullish. However, none of the Dashboard indicators triggered confirming bearish or bullish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) ticked downward 0.02% this week to close at $121.95. For the 32nd week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at 118.57, up from 118.13 at the end of last week. The spread between the IYY closing price and the moving average stands at +2.9%, down from +3.3% a week ago. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week clearly below its signal line. During the week, the MACD crossed below its signal line, which is where is ended the week. This bearish crossover has triggered a new bearish signal for this indicator, switching from bullish. The MACD of IYY stands at +0.674 while the signal line is at +0.708. As long as the MACD ends the week clearly below its signal line, this indicator will remain bearish. If the MACD was to end the week with clear separation with its signal line to the upside, this indicator would trigger a new bullish signal. If the MACD was to end the week basically in line with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 61.41, down from 64.08 at the close of last week. The signal for this indicator will remain bearish until August 25, 2017. If there is not a confirming bearish signal before then, the signal will go “stale” on that date and revert to neutral. A confirming bearish signal would occur if the indicator were to rise above the 75% level and fall back below it. This would push the “stale date” back six months from the date of the confirming bearish signal. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 63.97, a tick upward from last week’s reading of 63.75. This indicator will remain bearish until August 25, 2017, on which date the signal with go “stale” and revert to neutral. The “stale date” would be pushed back if a confirming bearish signal was generated before that date. This would happen if the indicator rises above the 70% bearish threshold and then starts to decline. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • The component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator ended this week flashing conflicting signals. This means that this indicator has triggered a new neutral signal, switching from bullish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. On Thursday, $NASI moved below the moving average and remained there at week’s end. This bearish crossover triggered a new bearish signal for this component indicator. $NASI ended the week at +161.33 versus the moving average at +167.08. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD line once again remained above the signal line. This is a BULLISH signal for this component indicator. The MACD of $NASI is +26.437 while the signal line is +21.602. This component indicator will remain neutral as long as its component indicators are not in agreement. This composite indicator would trigger a new bullish signal if the two component indicators both were both flashing bullish signals. This indicator would trigger a new bearish signal if the two component indicators were both flashing bearish signals.
  • AAII Investor Bullish Sentiment fell 3.2 percentage points this week to 32.3%. This indicator will remain bullish until November 30. If the indicator triggers a confirming bullish signal by falling below 25% and then rising above it, the “stale date” would be pushed back six months from the date of the confirming bullish signal. If there has not been a confirming bullish signal by November 30, the bullish signal will go “stale” and revert to neutral. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls back below it.

For the week ended June 16, 2017, two CI Market Dashboard indicators are bullish, four indicators are neutral and three are bearish.

 

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6/9/2017

Author: Wayne A. Thorp, CFA

Weekly Market Summary

Two major news events failed to generate much response from the U.S. market this week: the Congressional testimony of former FBI Director James Comey and the Parliamentary election in the U.K.

While Comey’s testimony didn’t paint the president in the most favorable light, there were no bombshell revelations that some were hoping for. Comey said that he felt President Trump had directed him to drop an investigation into former national security adviser Mike Flynn. However, he declined to offer his opinion as to whether he thought the president was trying to obstruct justice, instead deferring to the findings of the recently appointed special counsel.

Comey’s also admitted to directing his lawyer to leak the details of his conversations with the president in the hopes of prompting the appointment of a special counsel. Comey also testified that the president was not the target of the FBI’s investigation into Russia’s alleged interference in the 2016 presidential election. Comey did say, though, that he felt he was fired by the president because of the Russian investigation.

On the other side of the pond, U.K. Prime Minister Teresa May’s gamble to expand her power backfired. The results of this week’s snap election showed May’s ruling Conservative party short of the majority needed to control Britain’s Parliament. May is resisting opposition calls to resign and instead is moving to form a minority government with the Democratic Unionist Party, a small Northern Irish party whose 10 seats are enough to give May and her Conservatives a majority.

The election results now call into question what Britain’s exit from the European Union (EU), called Brexit, will look like. Without a majority in Parliament, May cannot take a hard stance in negotiations with the EU for fear she won’t have its support. European officials urged Britain to begin Brexit talks as soon as possible. The president of the European Council, Donald Tusk, said that the EU won’t put Britain’s two-year window for exiting on hold. That period is set to end in March 2019. According to The Wall Street Journal, the worst-case scenario is that Britain isn’t able to maintain a “coherent negotiating position” and the Brexit clock runs out with no arrangement in place. All of this injects a great deal of uncertainty into British and European markets.

Major Indexes

The Dow Jones Industrial Average (DJIA) gained 0.3% this week and hit a new intra-day high on Friday before settling at 21,271.97, which is also a new all-time high close. To the downside, we are still waiting to see if the 21,000 level offers round-number support. Below that is the 50-day moving average at 20,866.19 and more round-number support at 20,000.

The S&P 500 Index (SPX) shed 0.4% this week to close at 2,431.77. The large-cap index failed to hit any new intra-day or closing highs this week as it traded in a rather narrow band. We look to the 2,400 mark for initial support and below that is the 50-day moving average at 2,385.77.

Breadth in the market was decidedly negative this week, with only four of the 10 S&P Sector SPDRs posting gains. Financials (XLF) rebounded strongly this week, adding 3.6% while Energy (XLE) benefitted from a rise in oil prices to gain 2.0%. The recent run in Technology (XLK) took a breather this week, as the sector lost 2.1%. Consumer discretionary (XLY) also lost 2.0% for the week.

The broad market Wilshire 5000 (W5000) ticked downward 0.2% this week to 25,295.45. This index hit a new intra-day high on Monday but, like its compatriot indexes, traded in a narrow range this week. We look for initial round-number support at 25,000 and below that is the 50-day moving average at 24,839.26.

The tech-heavy Nasdaq Composite (COMP) dropped 1.6% this week to close at 6,207.92. Tech issues slumped 1.8% on Friday on cautious comments from Goldman Sachs on the sector and a 3.9% slide in Apple (AAPL) shares on concerns about iPhone modems. On an intra-day basis on Friday, the index broke through round-number support at 6,2000 and tested the 6,100 level. The 6,200 mark ultimately held so we look to it for initial support. Below that is the 6,100 level as well as the 50-day moving average at 6,057.10.

The Russell 2000 (RUT) index of smaller stocks enjoyed a strong week, bucking the general trend. The index gained 1.2% to close the week at 1,421.71. This marked a new all-time high close for the index. We look to the 1,400 level for initial downside support, followed by the 50-day moving average at 1,384.46.

The CBOE Volatility Index (VIX) added 9.7% this week to 10.70.

Computerized Investing Market Dashboard Indicators

This week, one of the CI Market Dashboard Indicators triggered a new bullish signal, switching from neutral. However, none of the Dashboard indicators triggered confirming bearish or bullish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) slipped 0.27% this week to close at $121.98. For the 31st week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at 118.13, up from 117.70 a week ago. The spread between the IYY closing price and the moving average stands at +3.3%, down from +3.9% last week. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week clearly above its signal line. The MACD being above its signal line is bullish, therefore this indicator remains bullish for the second consecutive week. The MACD of IYY stands at +0.764 while the signal line is at +0.681. As long as the MACD ends the week clearly above its signal line, this indicator will remain bullish. If the MACD was to end the week with clear separation with its signal line to the downside, this indicator would trigger a new bearish signal. If the MACD was to end the week basically in line with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 64.08, up from 61.48 at the end of last week. The signal for this indicator will remain bearish until August 25, 2017. If there is not a confirming bearish signal before then, the signal will go “stale” on that date and revert to neutral. A confirming bearish signal would occur if the indicator were to rise above the 75% level and fall back below it. This would push the “stale date” back six months from the date of the confirming bearish signal. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 63.75, up from last week’s reading of 62.72. This indicator will remain bearish until August 25, 2017, on which date the signal with go “stale” and revert to neutral. The “stale date” would be pushed back if a confirming bearish signal was generated before that date. This would happen if the indicator rises above the 70% bearish threshold and then starts to decline. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • The component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator ended this week flashing bullish signals. Now that both component indicators are in agreement, this indicator has triggered a new bullish signal, switching from neutral. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. At the end of this week $NASI was once again above its moving average. This is bullish for this component indicator. $NASI ended the week at +159.71 versus the moving average at +138.15. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD line moved above its signal line and remained there at week’s end. This bullish crossover triggered a new bullish signal for this component indicator, switching from bearish. The MACD of $NASI is +19.005 while the signal line is +13.208. This composite indicator will remain bullish as long as the two component indicators both are flashing bullish signals. This indicator would trigger a new bearish signal if the two component indicators were both flashing bearish signals. This indicator would trigger a new neutral signal if the two component indicators were not in agreement.
  • AAII Investor Bullish Sentiment climbed 8.5 percentage points this week to 35.4%. This indicator will remain bullish until November 30. If the indicator triggers a confirming bullish signal by falling below 25% and then rising above it, the “stale date” would be pushed back six months from the date of the confirming bullish signal. If there has not been a confirming bullish signal by November 30, the bullish signal will go “stale” and revert to neutral. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls back below it.

For the week ended June 9, 2017, four CI Market Dashboard indicators are bullish, three indicators are neutral and two are bearish.

 

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6/2/2017

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The holiday-shortened week started off rather muted but picked up steam as it progressed.

U.S. stocks edged lower on Tuesday following the Memorial Day holiday, as financials and energy stocks pulled the broad indexes lower. However, the range in which the indexes are moving continued to be quite narrow. Some analysts point to this as indicating apprehension among investors and traders as to how much longer the current bull market has left.

Wednesday closed the books on May and although U.S. stocks were mostly down that day, the major indexes all posted monthly gains. Overall, U.S. stocks climbed in May as upbeat first-quarter corporate earnings and signs of a steadying global economy helped offset sliding commodity prices and political uncertainty in Washington. The tech-heavy Nasdaq Composite posted a 2.5% gain for the month, while the Dow industrials added 0.3%. The S&P 500 climbed 1.2 % in May. It was the second consecutive monthly climb for the Dow and the S&P, and the seventh straight for the Nasdaq. Shares of financial companies, which jumped after Election Day as investors bet on faster economic growth, higher rates and looser regulations, retreated 1.4% in the S&P 500 in May. The monthly average of the CBOE Volatility Index, known as Wall Street’s “fear gauge,” in May was the lowest since 2006 and the second lowest in history.

June started off with broad gains on Thursday, as major indexes posted fresh highs. All 11 sectors in the S&P 500 gained, and the Dow Jones industrial average rose to its first record since March 1. Among the top performers, carmakers rose following solid auto sales and energy stocks climbed as the price of oil stabilized. The Dow Jones industrial average gained 0.6%. The S&P 500 added 0.8% and the Nasdaq Composite rose 0.8%. On Thursday, the crude oil prices stabilized after data released by the Energy Information Administration showed U.S. crude-oil inventories fell more than expected for the most recent week. Energy stocks in the S&P 500 rose 0.7%, reclaiming some of their earlier losses.

U.S. stocks rose to fresh highs Friday as the global economy and corporate profits are showing signs of strength. The gains in the U.S. came after a jobs report many analysts believe was solid enough for the Federal Reserve to raise interest rates later this month, but also suggested that the central bank would maintain a cautious pace of increases. The Dow industrials rose 0.3% Friday. The S&P 500 added 0.4% and the Nasdaq Composite climbed 0.9%, to 6305.80. All three indexes posted a second consecutive week of gains, with the Dow up 0.6% in the latest week, the S&P 500 up 1% and the Nasdaq Composite up 1.5%.

Major Indexes

The Dow Jones Industrial Average (DJIA) climbed 0.6% this week to close at 21,206.29, a new all-time high. The blue-chip index has now closed above the 21,000 mark for six consecutive trading days, so it seems that this psychological barrier has been defeated. We will have to wait to see if round-number support develops there. Below that is the 50-day moving average at 20,810.53.

The S&P 500 Index (SPX) added 1.0% this week to close at 2,439.07, also a new all-time high. The large-cap index has closed above the 2,400 mark for six consecutive days so it, too, seems to have conquered a psychological barrier. Again we will wait to see if support develops at the 2,400 level. Below that is the 50-day moving average at 2,377.51.

This week, eight of the 10 S&P Sector SPDRs posted gains. Health care (XLV) was the strongest sector this week, adding 2.0%. Materials (XLB) also posted a strong week, gaining 1.74%. Energy (XLE) returned to its losing ways, dropping 2.3% this week. Financials (XLF) were also down this week, dipping 0.7%.

The broad market Wilshire 5000 (W5000) gained 1.0% this week, climbing to 25,345.27. This, too, was a new all-time high for the index. The index has closed above the 25,000 level for six straight sessions, but we aren’t ready to look to it for round-number support. The 50-day moving average stands at 24,754.44 and may offer initial support.

The tech-heavy Nasdaq Composite (COMP) rallied 1.5% this week to close at 6,305.80. Not to be outdone by its compatriots, the index also posted a new all-time high. After offering some near-term resistance, we will wait to see if support develops around 6,200. Below that is round-number support at 6,000 and the 50-day moving average at 6,014.33.

The Russell 2000 (RUT) index of smaller stocks jumped 1.7% this week to 1,405.39. This is the first time since May 1 that the index closed above 1,400 and is less than 1% below its all-time high close of 1,419.43. The index also moved above its 50-day moving average this week. It is too early to tell if 1,400 will turn into near-term support, along with the moving average, which is at 1,380.04. Below those levels is possible support around 1,340.

The CBOE Volatility Index (VIX) ticked downward 0.6% this week to 9.75. This is the fourth-lowest close for Wall Street’s “fear gauge” since 1993.

Computerized Investing Market Dashboard Indicators

This week, one of the CI Market Dashboard Indicators triggered a new bullish signal, switching from bearish. Another indicator saw its signal switch from bearish to neutral. A third indicator triggered a new bullish signal, switching from neutral. However, none of the Dashboard indicators triggered confirming bearish or bullish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) climbed 1.1% this week to $122.21. For the 30th week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at 117.70. The spread between the IYY closing price and the moving average stands at +3.9%. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain BULLISH. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week clearly above its signal line. Since the last update, the MACD had made a bullish crossover above its signal line. Therefore, this indicator triggered a new bullish signal. The MACD of IYY stands at +0.693 while the signal line is at +0.509. As long as the MACD ends the week clearly above its signal line, this indicator will remain bullish. If the MACD was to end the week with clear separation with its signal line to the downside, this indicator would trigger a new bearish signal. If the MACD was to end the week basically in line with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 61.48, up from 56.91 at the end of last week. This indicator remains bearish. The signal for this indicator will remain bearish until August 25, 2017. If there is not a confirming bearish signal before then, the signal will go “stale” on that date and revert to neutral. A confirming bearish signal would occur if the indicator were to rise above the 75% level and fall back below it. This would push the “stale date” back six months from the date of the confirming bearish signal. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 62.72, down slightly from 72.87 a week ago. This indicator will remain bearish until August 25, 2017, on which date the signal with go “stale” and revert to neutral. The “stale date” would be pushed back if a confirming bearish signal was generated before that date. This would happen if the indicator rises above the 70% bearish threshold and then starts to decline. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • The component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator ended this week flashing contradictory signals. Therefore, this indicator has triggered a new neutral signal, switching from bearish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week $NASI made a bullish crossover above its moving average and remained above it at week’s end. In doing so, this component indicator triggered a new bullish signal. $NASI ended the week at +118.53 versus the moving average at +93.57. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD line remained below its signal line with meaningful separation between the two. This is a bearish signal for this component indicator. The MACD of $NASI is +7.724 while the signal line is +8.788. This composite indicator will remain neutral as long as the two component indicators are not in agreement. This indicator would trigger a new bullish signal if the two component indicators were both flashing bullish signals. This indicator would trigger a new bearish signal if the two component indicators were both flashing bearish signals.
  • AAII Investor Bullish Sentiment fell 5.9 percentage points this week to 26.9%. However, at the last update, bullish sentiment had fallen below the 25% bullish threshold. Last week sentiment rose above 25%, thereby triggering a new bullish signal, switching from neutral. This indicator will remain bullish for the next six months. If the indicator triggers a confirming bullish signal by once again falling below 25% and then rising above it, the “stale date” would be pushed back. If there has not been a confirming bullish signal by November 30, the bullish signal will go “stale” and revert to neutral. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls back below it.
  • The Shiller CAPE ended the week at 29.88. This is the highest week- or month-ending reading since March 2002. However, the indicator remains neutral. With the median historical CAPE standing at 16.14, this week's reading is between the bearish threshold of 32.28 (twice the historical median) and the bullish threshold of 8.07 (one-half the historical median). If the Shiller CAPE reading were to cross the bearish threshold (32.28) to the upside, the indicator would trigger a bearish signal. Currently, the Shiller CAPE is 7.4% below the bearish threshold. Alternatively, if the CAPE reading were to fall below the bullish threshold (8.07), which is one-half the historical median level, the indicator would trigger a bullish signal. The CAPE would need to fall 73.0% to trigger a new bullish signal.

For the week ended June 2, 2017, three CI Market Dashboard indicators are bullish, four indicators are neutral and two are bearish.

 

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5/19/2017

Author: Wayne A. Thorp, CFA

There will not be a Market Dashboard update next weekend as we take a break for the Memorial Day weekend. From everyone at CI and AAII, we wish you a safe and enjoyable holiday.

 

Weekly Market Summary

 

Political drama, corporate earnings and oil prices were the drivers of the U.S. stock market this week.

Most of the attention was on Washington, D.C. and the Trump administration. After revelations that the President shared sensitive intelligence information with Russian diplomats and rumors of an alleged memo written by former FBI director James Comey in which the President had asked him to end his investigation into former national security adviser Michael Flynn’s ties to Russia, U.S. stocks turned in their worst day of the year on Wednesday.

U.S. stocks started the week on a high note. The Dow Jones Industrial Average ended its losing streak on Monday and flirted with the 21,000 mark. A sharp rise in oil prices fueled the rise in stocks after Saudi Arabia and Russia announced support for extended oil supply cuts. The S&P 500 Index and Nasdaq Composite both closed at record highs.

The Dow Jones Industrial Average started Tuesday strongly following strong earnings from Home Depot (HD). However, uncertainty surrounding President Donald Trump's release of allegedly classified information to Russia sapped the momentum from the market. Still, the S&P 500 Index and Nasdaq Composite hit record highs once again, and the Nasdaq ended the day in the black.

On Wednesday, the snowballing intrigue surrounding the Trump administration sent stocks tumbling. The S&P 500 fell 1.8% that day, its biggest one-day drop since September of last year. In addition, the Dow Jones industrial average shed 1.8% and the NASDAQ Composite fell 2.6% after posting a new all-time high close the day before. In addition, the VIX spiked 46% on Wednesday. In turn, investors flocked to safe-haven assets such as Treasuries and gold. Bank stocks were hit hardest, as financials in the S&P 500 were down 3% on Wednesday as hopes for bank deregulation and tax reform faded.

After suffering its worst session in months, the Dow Jones Industrial Average was able to bounce back Thursday, overcoming a sell-off in Cisco Systems (CSCO) following its earnings announcement and lingering concerns about the President’s ability to pass his legislative agenda. Wal-Mart (WMT) shares saw a strong post-earning bump which, along with a strong day for tech stocks pushed the Dow, S&P 500 Index and Nasdaq Composite higher.

On Friday, the Dow Jones Industrial Average enjoyed a triple-digit gain on the heels of strong quarterly results from Deere (DE), which in turn gave a boost to Dow component Caterpillar (CAT). Oil prices also rose ahead of next week’s Organization of the Petroleum Exporting Countries (OPEC) meeting. As such, energy stocks led the S&P 500 Index higher, and the tech-heavy Nasdaq Composite posted a gain for the day. However, the major U.S. indexes closed the week in the red, as Friday’s gains weren't enough to wipe away Wednesday’s sell-off.

The Dow Jones Industrial Average (DJIA) closed the down 0.4% to 20,804.84. After hitting the 21,00 mark earlier in the week, the blue-chip index once again failed to hold onto it. This strengthens our opinion that it is becoming a psychological barrier. Wednesday’s sell-off sent the index below its 50-day moving average, but the index was able to rally back above it by week’s end. We view the 50-day moving average (20,775.71) as offering minimal support to the downside. Instead, we look to the 20,400 to 20,500 range for initial support, as this marks the intermediate lows of mid-April.

The S&P 500 Index (SPX) dropped 0.4% this week to close at 2,381.73. The large-cap index mimicked last week’s activity by hitting a new all-time close on Monday and then fading the rest of the week. The 2,400 level continues as a near-term resistance point. We question the strength of the 50-day moving average (2,369.53) after the index fell below it on Wednesday, even though the index rallied back above it by the end of the week. Instead, we are looking to support created by April’s intermediate lows around 2,330.

This week, only four of the 10 S&P Sector SPDRs posted gains. Real estate (XLRE) finally posted a strong week, adding 1.34% to lead all sectors. Consumer staples (XLP) also posted a weekly reversal by rising 0.71%. Energy (XLE) posted its second weekly win in a row by climbing 0.5%. Financials (XLF) were the weakest this week, losing 0.9% on fading hopes of tax reform and deregulation.

The broad market Wilshire 5000 (W5000) lost 0.38% this week to close at 24,762.35. The index hit a new all-time high close on Monday but still wasn’t able to crack the 25,000 mark. This may prove a difficult obstacle in the near-term. The index also fell through its 50-day moving average on Wednesday, lessening its reliability as support moving forward. We now look to the 24,250 level for initial support, which marks the April lows.

The tech-heavy Nasdaq Composite (COMP) wasn’t able to continue its weekly winning streak, falling 0.6% this week to 6,083.70. However, the index did notch a new all-time high close on Tuesday. The index found round-number support around 6,000 on Wednesday, so we see it as near-term support moving forward. Below that is the 50-day moving average at 5,954.49.

The Russell 2000 (RUT) index of smaller stocks fell 1.1% this week to 1,367.33. The index tested the 1,400 mark earlier in the week but this resistance level held. Wednesday’s sell-off sent the index below its 50-day moving average but, unlike other indexes, it was not able to reclaim it before week’s end. To the downside, we look for near-term support just above the 1,340 level.

The CBOE Volatility Index (VIX) added 15.8% this week following a wild ride. Wall Street’s “fear gauge” jumped 46% on Wednesday to its highest levels in over a month but eased off as the week progressed, moving back below its 50- and 200-day moving averages. Eventually, it closed at 12.04.

Computerized Investing Market Dashboard Indicators

This week, two of the CI Market Dashboard Indicators triggered new bearish signals, both switching from neutral. Another indicator saw its bullish signal go stale and revert to neutral. However, none of the Dashboard indicators triggered confirming bearish or bullish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) fell 0.25% this to $119.34. However, for the 28th week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at 116.96, up from 116.64 last week. The spread between the IYY closing price and the moving average narrowed to +2.0% from +2.6%. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week clearly below its signal line. As a result, this indicator has triggered a new bearish signal, switching from neutral. The MACD of IYY stands at +0.222 while the signal line is at +0.398. As long as the MACD ends the week clearly below its signal line, this indicator will remain bearish. If the MACD was to end the week with clear separation with its signal line to the upside, this indicator would trigger a new bullish signal. If the MACD was to end the week basically in line with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 53.35, down from last week’s reading of 54.41. The signal for this indicator will remain bearish until August 25, 2017. If there is not a confirming bearish signal before then, the signal will go “stale” on that date and revert to neutral. A confirming bearish signal would occur if the indicator were to rise above the 75% level and fall back below it. This would push the “stale date” back six months from the date of the confirming bearish signal. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 62.36, a tick upward from 62.21 a week ago. This indicator will remain bearish until August 25, 2017, on which date the signal with go “stale” and revert to neutral. The “stale date” would be pushed back if a confirming bearish signal was generated before that date. This would happen if the indicator rises above the 70% bearish threshold and then starts to decline. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • The component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator ended this week both flashing bearish signals. Therefore, this composite indicator has triggered a new bearish signal, switching from neutral. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. $NASI ended the week below its moving average, which is bearish for this component indicator. $NASI ended the week at +40.98 versus the moving average at +70.07. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD line crossed below its signal line and remained there at week’s end. This bearish crossover triggered a new bearish signal for this component indicator. The MACD of $NASI is +12.969 while the signal line is +24.65. This composite indicator will remain bearish as long as its component indicators both have bearish signals. This indicator would trigger a new bullish signal if the two component indicators were both flashing bullish signals. This composite indicator would trigger a new neutral signal if the two component indicators were not in agreement.
  • AAII Investor Bullish Sentiment fell 8.9 percentage points this week to 23.9%. This is the largest one-week decline since the end of July 2015 and bullish sentiment is now at its lowest level since the November election. It has also been six months since this indicator generated a confirming bullish signal. As a result, the bullish signal went “stale” and reverted to neutral from bullish. However, this week bullish sentiment fell below the 25% bullish threshold, so when its rises above 25%, a new bullish signal will be generated. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls back below it.

For the week ended May 19, 2017, one CI Market Dashboard indicator is bullish, four indicators are neutral and four are bearish.

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5/12/2017

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The U.S. investors and traders started the week encouraged by the victory of centrist candidate Emmanuel Macron in the French presidential election and liberal candidate Moon Jae-in emerged victorious in South Korea’s presidential election. As it turned out, however, it appears that the results had already been priced into the market. Instead, a series of disappointing quarterly announcements and economic data along with unexpected political developments in Washington, D.C., sent U.S. stocks generally lower by the end of the week.

On Monday, investors digested comments from several regional Federal Reserve presidents this week. On Monday, Cleveland Fed president Loretta Mester warned of a possible recession, should the Fed “delay too long in taking the next normalization step.” St. Louis Fed president James Bullard countered with “The policy rate is approximately at an appropriate setting.” On Tuesday, Kansas City Fed president Esther George said the Fed should continue to gradually increase interest rates, while Boston Fed president Eric Rosengren warned against major changes to Fannie Mae and Freddie Mac.

On Tuesday night, President Trump surprisingly said to FBI Director James Comey “You’re Fired!”, setting off the latest political firestorm of the Trump administration. With politicians on both sides of the aisle calling for an investigation, the President’s ability to pass his legislative agenda has become increasingly uncertain.

This was not a good week for retail stocks after Macy’s (M) announced a major earnings miss. Dillard’s (DDS) also missed its consensus target and saw its shares tumble. Although Kohl’s (KSS) announced a positive earnings surprise, it missed its revenue target, which sent its shares lower, too. J.C Penney (JCP) shares hit their lowest mark in their 36-year trading history, according to Schaeffer’s Investment research following their announcement that quarterly sales fell short of forecasts. On the bright side, on Friday, the Commerce Department reported that sales at U.S. retailers rose in April, and March sales were stronger than originally estimated. Retail sales increased 0.4% from March to April and were 4.5% higher compared to a year ago. A 0.2% monthly decline for March was revised up to show a 0.1% increase. However, the April increase did come in below more estimates.

The Dow Jones Industrial Average (DJIA) ended the week on a four-day losing streak, ultimately shedding 0.53% this week to close at 20,896.61. The blue-chip index wasn’t able to hold the high ground above 21,000 and we are starting to wonder if that is becoming a psychological resistance point. To the downside, the 20,800 level may offer support, as this would fill in the gap created in late April. Below that is the 50-day moving average at 20,786.96.

The S&P 500 Index (SPX) dropped 0.35% this week to close at 2,390.90. The large-cap index hit a new all-time high on Monday but wasn’t able to maintain the momentum. The 2,400 level still appears to be a near-term resistance point. To the downside, there may be support around 2,375, which would be the point that the late-April price gap would be filled in. There is also the 50-day moving average at 2,368.47.

This week, only two of the 10 S&P Sector SPDRs posted gains. Energy (XLE) enjoyed a rare weekly win as data showed a big drop in U.S. crude inventories. For the week, the ETF added 0.65%. Technology (XLK) shares continued their winning streak, climbing 1.1%. Utilities (XLU) ended the week unchanged. Materials (XLB) was the weakest sector this week, losing 1.6%.  

The broad market Wilshire 5000 (W5000) lost 0.5% this week to close at 24,855.89. It still appears that the 25,000 mark will offer near-term resistance. If the index were to fill in the price gap from late April, it would fall to around 24,650. This is also near the 50-day moving average, which is currently at 24,660.22.

The tech-heavy Nasdaq Composite (COMP) bucked the trend of the other major indexes, posting a 0.34% gain this week to 6,121.23. The index notched a new all-time high close on Wednesday, its third of the week. To the downside, we look for round-number support at the 6,000 mark. Below that is the 50-day moving average at 5,929.71.

The Russell 2000 (RUT) index of smaller stocks fell 1.02% this week to 1,382.77. The index is flirting with support around the 1,380 level. Just below that is the 50-day moving average at 1,377.87.

The CBOE Volatility Index (VIX) ticked downward by 1.6% this week to 10.40. On Monday, Wall Street’s “fear gauge” closed at 9.77, its lowest level since December 1993. In addition, this was the first time in over 10 years the VIX closed below 10 and was only the 11th time it closed below 10 since the index was launched in 1993.

Computerized Investing Market Dashboard Indicators

This week, two of the CI Market Dashboard Indicators triggered new neutral signals, both switching from bullish. However, none of the Dashboard indicators triggered confirming bearish or bullish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) fell 0.47% this to $119.64. However, for the 27th week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at 116.64, up from 116.28 a week ago. The spread between the IYY closing price and the moving average stands at +2.6%. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week basically even with its signal line. As a result, this indicator has triggered a new neutral signal, switching from bullish. The MACD of IYY stands at +0.524 while the signal line is at +0.523. As long as the MACD ends the week with no clear separation between it and its signal line, this indicator will remain neutral. If the MACD was to end the week with clear separation with its signal line to the upside, this indicator will trigger a new bullish signal. If the MACD was to end the week below its signal line with meaningful separation, this would trigger a new bearish signal. If the MACD was to end the week without “meaningful” separation between it and its signal line, this would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 54.41, down from 58.93 the week before. The signal for this indicator will remain bearish until August 25, 2017. If there is not a confirming bearish signal before then, the signal will go “stale” on that date and revert to neutral. A confirming bearish signal would occur if the indicator were to rise above the 75% level and fall back below it. This would push the “stale date” back six months from the date of the confirming bearish signal. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 62.21, a tick downward from last week’s reading of 65.9. This indicator will remain bearish until August 25, 2017, on which date the signal with go “stale” and revert to neutral. The “stale date” would be pushed back if a confirming bearish signal was generated before that date. This would happen if the indicator rises above the 70% bearish threshold and then starts to decline. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • The component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator ended this week flashing contradictory signals. Therefore, this indicator has triggered a new neutral signal, switching from bullish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. $NASI crossed below its moving average this week and remained below it at week’s end. This bearish crossover triggered a new bearish signal for this component indicator. $NASI ended the week at +110.45 versus the moving average at +128.74. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line ended the week above the signal line with “meaningful” separation between the two. This is a bullish signal for this component indicator. The MACD of $NASI is +30.307 while the signal line is +30.317. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain neutral as long as the two component indicators are not in agreement. The indicator would trigger a new bullish signal if the two component indicators were both flashing bullish signals. This composite indicator would trigger a new bearish signal if the two component indicators were both flashing bearish signals.
  • AAII Investor Bullish Sentiment fell 5.3 percentage points this week to 32.7%. This indicator will remain bullish until May 18, 2017. If there is not another confirming bullish signal before then, the current bullish signal will go “stale” and revert to neutral. A confirming bullish signal would occur if the reading falls below 25% and then climbs back above it. If there is a confirming bullish signal before May 18, 2017, the “stale date” would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls back below it.

For the week ended May 12, 2017, two CI Market Dashboard indicators are bullish, five are neutral and two are bearish.

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5/5/2017

Author: Wayne A. Thorp, CFA

Weekly Market Summary

Investors began and ended the week on high notes, but spent the rest of the week processing a mix of lackluster earnings and economic news.

Monday kicked off May trading with technology stocks continuing their recent run. The NASDAQ Composite hit a new high on Monday, along with constituent stocks Apple (AAPL), Alphabet (GOOG), Microsoft (MSFT), Amazon.com (AMZN) and Facebook (FB). According to The Wall Street Journal, Monday was the first time that those five stocks, which are also the five largest NASDAQ stocks in terms of market cap, all hit new all-time highs on the same day.

For the next few days, however, disappointing economic data and a string of lackluster earnings announcements weighed on stocks. The Commerce Department published its first estimate of U.S. economic growth in the first quarter of 2017, which came in at 0.8%. This fell well short of estimates. The Institute for Supply Management (ISM) reported that U.S. factory activity expanded at a slower rate in April and the Commerce Department reported that consumer spending was flat in March for the second straight month. U.S. automakers also reported a sharp decline in April car sales, as worries build of a slowdown in the industry. In addition, oil prices fell to a five-month low; more investors are questioning OPEC’s ability to ease global supply as U.S. crude production expands and inventories rise.

Solid corporate earnings and a stronger-than-expected April jobs report lifted stocks on Friday. Hiring data released by the Labor Department bolstered the case that the broader economy is strengthening after weak signals earlier. Nonfarm payrolls rose by a seasonally adjusted 211,000 in April from the prior month. Economists surveyed by The Wall Street Journal had expected 188,000 new jobs.

The Dow Jones Industrial Average (DJIA) managed to add 0.3% this week to close at 21,006.94. Friday as marked the first time since March 3 that the blue-chip index closed above 21,000. The index is now 0.51% below its all-time high close of 21,115.55. We look to the 50-day moving average at 20,783.81 for initial support.

The S&P 500 Index (SPX) climbed 0.6% to end the week at 3,399.29. This marks a new all-time high close for the index. I am curious to see if the 2,400 level offers any upside resistance moving forward. To the downside, there is the 50-day moving average at 2,366.42 for initial support.

This week, nine of the 10 S&P Sector SPDRs posted gains. Financials (XLF) and Technology (XLK) led the way by gaining 1.32% and 1.08%, respectively. Energy (XLE) was the only sector to post a loss for the week, losing 0.78%, as oil prices continued to fall.

The broad market Wilshire 5000 (W5000) rose 0.4% this week to close at 24,975.87. This marks the highest closing value ever for the index. I still believe that the 25,000 may offer some near-term resistance. To the downside, there is the 50-day moving average at 24,643.40.

The tech-heavy Nasdaq Composite (COMP) gained 0.9% this week and closed Friday at 6,100.76. This also marked a new all-time high for the index. To the downside, we look for round-number support at the 6,000 mark. Below that is the 50-day moving average at 5,903.87.

The Russell 2000 (RUT) index of smaller stocks fell 0.25% this week to 1,396.99. The index fell through round-number support at 1,400 but seemingly found footing in the 1,385 to 1,390 range. Below that is the 50-day moving average at 1,378.72.

The CBOE Volatility Index (VIX) fell 3% this week to 10.57.

Computerized Investing Market Dashboard Indicators

This week, none of the CI Market Dashboard Indicators triggered a change in signal. Also, none of the Dashboard indicators triggered confirming bearish or bullish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) climbed 0.6% this week to $120.20. For the 26th week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at 116.28. The spread between the IYY closing price and the moving average stands at +3.4%. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week with clear upside separation with its signal line. This indicator remains bullish for the second consecutive week. The MACD of IYY stands at +0.577 while the signal line is at +0.441. As long as the MACD continues to end the week with clear separation with its signal line to the upside, this indicator will remain BULLISH. If the MACD was to end the week below its signal line with meaningful separation, this would trigger a new bearish signal. If the MACD was to end the week without “meaningful” separation between it and its signal line, this would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 58.93, down from 61.32 the week before. The signal for this indicator will remain bearish until August 25, 2017. If there is not a confirming bearish signal before then, the signal will go “stale” on that date and revert to neutral. A confirming bearish signal would occur if the indicator were to rise above the 75% level and fall back below it. This would push the “stale date” back six months from the date of the confirming bearish signal. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.5
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 65.9, down from 67.82 a week ago. This indicator will remain bearish until August 25, 2017, on which date the signal with go “stale” and revert to neutral. The “stale date” would be pushed back if a confirming bearish signal was generated before that date. This would happen if the indicator rises above the 70% bearish threshold and then starts to decline. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • The component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are both flashing bullish signals this week. Therefore, this composite indicator remains bullish for the third week in a row. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. $NASI once again ended the week above its moving average, which is bullish for this component indicator. $NASI ended the week at +149.49 versus the moving average at +138.95. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line ended the week above the signal line with “meaningful” separation between the two. This is a bullish signal for this component indicator. The MACD of $NASI is +38.491 while the signal line is +12.385. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bullish if the two component indicators are both flashing bullish signals. This composite indicator would trigger a new bearish signal if the two component indicators are both flashing bearish signals. The indicator would trigger a new neutral signal if the two component indicators are not in agreement.
  • AAII Investor Bullish Sentiment was 38.1% this week, basically unchanged from a week ago. This indicator will remain bullish until May 17, 2017. If there is not another confirming bullish signal before then, the current bullish signal will go “stale” and revert to neutral. A confirming bullish signal would occur if the reading falls below 25% and then climbs back above it. If there is a confirming bullish signal before May 17, 2017, the “stale date” would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls back below it.

For the week ended May 5, 2017, four CI Market Dashboard indicators are bullish, three are neutral and two are bearish.

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4/21/2017

Author: Wayne A. Thorp, CFA

Weekly Market Summary

U.S. stocks posted healthy gains this week, boosted by a strong start to the U.S. earnings season. However, promises from President Trump for a “massive tax cut,” perhaps “bigger…than any tax cut ever” did not garner the same response it would have several weeks. The market seems to be looking for action not rhetoric out of Washington D.C. these days, especially in the light of the failed health care reforms. However, there are indications that Republicans are putting together a revised replacement to Obamacare that could be put to a vote in the near future. Investors and traders are also looking across the Atlantic to this weekend’s presidential election in France. Adding to European intrigue, British Prime Minister Theresa May called a snap election for early June in attempts to strengthen public support for Brexit. On the other side of the world, tensions continue to rise between the U.S. and North Korea, with China increasing the readiness of its troops along its border with N. Korea.

The Dow Jones Industrial Average (DJIA) broke its two-week losing streak, adding 0.5% this week to close at 20,547.76. During our break, the blue-chip index fell below its 50-day moving average, removing a key level of support. The Dow has now traded below its 50-day moving average for seven consecutive trading days, the longest such streak since September-October of last year. It does appear that the index has found support around the 20,400 level. Below that is round-number support at 20,000.

The S&P 500 Index (SPX) posted a 0.9% gain this week to close at 2,348.69. Like the Dow, the large-cap index fell below its 50-day moving average two weeks ago and has remained there for the last seven trading days. Having lost this key support level, we now look to the 2,330 level for initial support. Below that is round-number support at 2,300.

This week, eight of the 10 S&P Sector SPDRs posted gains. Industrials (XLI) led the way, adding 2.2%, followed closely by Consumer Discretionary (XLY), which climbed 2.0%. Energy (XLE) dropped 2.2% this week, as oil priced tumbled on doubts that global production cuts will overcome oversupply. For the week, Technology (XLK) gained 1.5%.

The broad market Wilshire 5000 (W5000) rose 1.0% this week to close at 24,519.95. After testing its 50-day moving average several times, the index broke below it two weeks ago. It managed to close back above it on Thursday but dipped back below it to close there on Friday. Having lost this meaningful support level, we now look to the 24,250 level for initial support.

The tech-heavy Nasdaq Composite (COMP) posted a strong week, climbing 1.8% to 5,910.52. Amidst all the recent market turmoil, the index managed to post a new all-time high close on Thursday at 5,916.78 and has seemingly broken the resistance spell of the 5,900 level. Matching its other index peers, the index fell below its 50-day moving average two weeks ago, but only for a day. We continue to look at the 50-day moving average, now at 5,853.16, for initial support. Below that is support between 5,750 and 5,800.

The Russell 2000 (RUT) index of smaller stocks surged 2.6% this week to close at 1,379.85. The index has been moving above and below its 50-day moving average for the last several weeks. On Thursday, the index closed above the moving average, only to fall back below it on Thursday. Since early December, the index has been moving in a trading range between 1,340 and 1,410, with no indication of where the next move will take it.

The CBOE Volatility Index (VIX) fell 8.3% this week to 14.63 after hitting a five-month-high last week.

Computerized Investing Market Dashboard Indicators

This week, one of the CI Market Dashboard Indicators triggered a new neutral signal, shifting from bearish, while another shifted from bullish from neutral. However, none of the Dashboard indicators triggered confirming bearish or bullish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) climbed 1.2% this week to $116.57. For the 24th week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at 115.36. The spread between the IYY closing price and the moving average stands at +2.2%. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week basically in line with its signal line. Without any meaningful separation between the MACD and signal lines, this indicator has triggered a new neutral signal, switching from bearish. The MACD of IYY stands at -0.028 while the signal line is at -0.013. As long as the MACD ends the week without clear separation with its signal line, this indicator will remain NEUTRAL. If the MACD were to end the week above its signal line with meaningful separation, this would trigger a new bullish signal. If the MACD were to end the week below its signal line with meaningful separation, this would trigger a new bearish signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 55.37, up from 46.91 a week ago. The signal for this indicator will remain bearish until August 25, 2017. If there is not a confirming bearish signal before then, the signal will go “stale” on that date and revert to neutral. A confirming bearish signal would occur if the indicator were to rise above the 75% level and fall back below it. This would push the “stale date” back six months from the date of the confirming bearish signal. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 65.2, virtually unchanged from the week before. This indicator will remain bearish until August 25, 2017, on which date the signal with go “stale” and revert to neutral. The “stale date” would be pushed back if a confirming bearish signal was generated before that date. This would happen if the indicator rises above the 70% bearish threshold and then starts to decline. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • The component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are both flashing bullish signals this week. As a result, this has triggered a new bullish signal for this composite indicator, a shift from neutral. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. $NASI crossed above its moving average this week and remained above it at week’s end. This bullish crossover triggered a new bullish signal for this component indicator. $NASI ended the week at -72.61 versus the moving average at -84.3. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line ended the week above the signal line with “meaningful” separation between the two. This is a bullish signal for this component indicator. The MACD of $NASI is -45.686 while the signal line is -50.471. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bullish as long as the two component indicators are both flashing bullish signals. This composite indicator would trigger a new bearish signal if the two component indicators are both flashing bearish signals. The indicator would trigger a new neutral signal if the two component indicators are not in agreement.
  • AAII Investor Bullish Sentiment fell 3.3-percentage points this week to 25.7%. This is its lowest reading in 24 weeks. This indicator will remain bullish until May 17, 2017. If there is not another confirming bullish signal before then, the current bullish signal will go “stale” and revert to neutral. A confirming bullish signal would occur if the reading falls below 25% and then climbs back above it. If there is a confirming bullish signal before May 17, 2017, the “stale date” would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls back below it.

For the week ended April 21, 2017, three CI Market Dashboard indicators are bullish, four are neutral and two are bearish.

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4/7/2017

Author: Wayne A. Thorp, CFA
We will be on Spring Break next week so there will not be an update of the CI Market Dashboard. We wish everyone a happy and safe Easter and Passover. The next Dashboard update will be the weekend of April 22.

 

Weekly Market Summary

Mixed economic data and geopolitics pushed and pulled the markets throughout the week. Weaker-than-expected car sales data kicked off a week that saw a strong report on private-sector hiring give way to a mixed March jobs report. In between was the release of the Fed’s March meeting minutes that revealed the central bank’s intent to reduce its massive balance sheet and a U.S. missile strike in Syria.

The Dow Jones Industrial Average (DJIA) succumbed to late-session selling on Friday to end the week down 0.03% at 20,656.10. The blue-chip index has traded within a 370-point range for the last several trading sessions, an indication of uncertainty in the marketplace. This is often a precursor to a strong move, although we are unsure whether it will be the bulls or bears that take the reins. The index seems bounded at the upper end around 20,750 and the 50-day moving average (20,604.50) to the downside. The moving average has been holding for the last two weeks so we do view it as a viable support level.

The S&P 500 Index (SPX) fell 0.3% this week to close at 2,355.54. There appears to be resistance building around 2,375 as the large-cap index has been trading in a narrow range for the last several sessions. To the downside is the 50-day moving average at 2,346.89. Below that is round-number support at 2,300.

This week, seven of the 10 S&P Sector SPDRs posted gains. Real Estate (XLRE) led the way with a 0.7% gain, followed by Energy (XLE), which added 0.66% after missile strikes in Syria boosted oil prices. Financials (XLF) lagged all other sectors this week, falling 0.88%. Consumer Discretionary (XLY) stocks were also weak, dropping 0.78% for the week.

The broad market Wilshire 5000 (W5000) lost 0.36% this week to close at 25,535.23. The index has been repeatedly testing its 50-day moving average over the last several trading sessions. Thus far, it has held, so we view it as meaningful support to the downside. The average currently is at 24,465.14. To the upside, there appears to be resistance forming around the 24,750 level.

The tech-heavy Nasdaq Composite (COMP) shed 0.6% this week, although the index managed another record high on Wednesday. The index now stands at 5,877.81. It has been unable remain above the 5,900 mark, so we view that level as upside resistance. To the downside is the 50-day moving average at 5,814.54.

The Russell 2000 (RUT) index of smaller stocks lagged the other major U.S. indexes this week, falling 1.54% to 1,364.56. The index once again fell below its 50-day moving average this week. To the downside, we continue to view the 1,340 level as initial support. To the upside, it seems that resistance is forming around the 1,390 level.

The CBOE Volatility Index (VIX) tacked on 4.0% this week to close at 12.87.

Computerized Investing Market Dashboard Indicators

This week, one of the CI Market Dashboard Indicators triggered a new neutral signal, shifting from bullish. However, none of the Dashboard indicators triggered confirming bearish or bullish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) fell 0.36% this week to $117.84. However, for the 22nd week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at 114.59, up from last week’s reading of 114.03. The spread between the IYY closing price and the moving average narrowed to +2.8% from +3.7% a week ago. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week with clear separation with this signal line to the downside. Therefore, for the fifth week in a row, this indicator is bearish. The MACD of IYY stands at +0.109 while the signal line is at +0.194. As long as the MACD ends the week with clear downside separation with the signal line, this indicator will remain bearish. If the MACD were to end the week above its signal line with meaningful separation, this would trigger a new bullish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 55.01, down from 59.12 the week before. The signal for this indicator will remain bearish until August 25, 2017. If there is not a confirming bearish signal before then, the signal will go “stale” on that date and revert to neutral. A confirming bearish signal would occur if the indicator were to rise above the 75% level and fall back below it. This would push the “stale date” back six months from the date of the confirming bearish signal. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 65.6, a tick upward from last week’s reading of 65.59. This indicator will remain bearish until August 25, 2017, on which date the signal with go “stale” and revert to neutral. The “stale date” would be pushed back if a confirming bearish signal was generated before that date. This would happen if the indicator rises above the 70% bearish threshold and then starts to decline. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • The component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing conflicting signals this week. As a result, this has triggered a new neutral signal for this composite indicator, a shift from bullish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. $NASI crossed below its moving average this week and remained below it at week’s end. This bearish crossover triggered a new bearish signal for this component indicator. $NASI ended the week at -33.95 versus the moving average at -24.83. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line ended the week above the signal line with “meaningful” separation between the two. This is a bullish signal for this component indicator. The MACD of $NASI is -51.718 while the signal line is -63.43. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain neutral as long as the two component indicators are not in agreement. This composite indicator would trigger a new bullish signal if the two component indicators are both flashing bullish signals. The indicator would trigger a new bearish signal if the two component indicators are both flashing bearish signals.
  • AAII Investor Bullish Sentiment fell 1.9-percentage points this week to 28.3%. This is its lowest reading in 22 weeks. This indicator will remain bullish until May 17, 2017. If there is not another confirming bullish signal before then, the current bullish signal will go “stale” and revert to neutral. A confirming bullish signal would occur if the reading falls below 25% and then climbs back above it. If there is a confirming bullish signal before May 17, 2017, the “stale date” would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls back below it.

For the week ended April 7, 2017, two CI Market Dashboard indicators are bullish, four are neutral and three are bearish.

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3/31/2017

Author: Wayne A. Thorp, CFA

Weekly Market Summary

U.S. stocks limped across the finish line as the first quarter of 2017 ended. Growing uncertainty over whether the Trump administration will be able to implement the pro-business economic agenda it promised during the campaign sapped the momentum of the market. However, volatility remained low. The CBOE Volatility Index, known as Wall Street’s “fear gauge,” posted its second-lowest quarterly average on record, according to the WSJ Market Data Group.

The Dow Jones Industrial Average (DJIA) ticked upward 0.3% this week to close at 20,663.22. Monday’s decline marked the blue-chip index’s eighth losing session in a row, its longest losing streak in nearly six years. For March, the index shed 0.7%, its first monthly decline since October. However, for the first quarter, the index added 4.6%. This was the sixth consecutive quarterly gain for the index, its longest quarterly winning streak since 2006. On Monday, the index tested its 50-day moving average, which held. Moving forward, we look to the moving average, currently at 20,532.55, as near-term support.

The S&P 500 Index (SPX) ended the week at 2,362.72 after gaining 0.8%. The large-cap index ticked downward 0.04% for March but posted its best quarterly gain since 2015 after climbing 5.5%. The index also tested its 50-day moving average on Monday but managed to bounce off it. We look to the average, currently at 2,339.43, for downside support. Below it is round-number support at 2,300.

This week, eight of the 10 S&P Sector SPDRs posted gains. Utilities (XLU) reversed their gains from last week, losing 1.1%. Consumer staples (XLP) also slipped 0.2% for the week. Energy (XLE) posted a 2.0% weekly gain as oil prices rebounded. For the month, however, only three of the 10 Sector SPDRs were up. Financials (XLF) fell 3.3% to lag all sectors, as uncertainty grows about tax reform and deregulation, while Technology (XLK) and Consumer Discretionary (XLY) both gained 1.8% for the month. And for the first quarter, Energy was the only Sector SPDR to fall, sliding 7.2%. The Technology sector was the quarterly leader, jumping 10.2%.

The broad market Wilshire 5000 (W5000) gained 1% this week to close at 24,624.72. For March, the index eked out a 0.1% gain and for the quarter it climbed 5.1%. The index fell below its 50-day moving average and closed below it on Monday but rebounded on Tuesday and rose strongly off it. We still view the moving average, currently at 24,399.90 as near-term support, followed by round-number support at 24,000.

The tech-heavy Nasdaq Composite (COMP) ended the week up 0.8% to 5,911.74. The index added 1.5% in March while its 9.8% first-quarter gain was its best since 2013. On Monday, the index tested its 50-day moving average but moved away from it to the upside. We view the average, currently at 5,786.67, as initial downside support, followed by round-number support at 5,700.

The Russell 2000 (RUT) index of smaller stocks outperformed the other major U.S. indexes this week, climbing 2.3% to 1,385.92. For the quarter, the index ticked downward 0.1% while gaining 2.1% in the first quarter. The index tested its 1,340-support level on Monday before rebounding strongly to close above its 50-day moving average on Friday. We are skeptical of the moving average, which is currently at 1,376.96, to provide near-term support. We must wait and see whether it holds in the coming days. However, we are gaining confidence in the support level around 1,340, which has been tested and held on multiple occasions in the last couple of weeks.

The CBOE Volatility Index (VIX) slipped 4.6% this week to 12.27. For the month it lost 4.3% while dropping 11.9% in the first quarter.

Computerized Investing Market Dashboard Indicators

This week, one of the CI Market Dashboard Indicators triggered a new bullish signal, shifting from bearish. However, none of the Dashboard indicators triggered confirming bearish or bullish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) gained 1% this week to close at $118.26. For the 21st week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at 114.03, up from last week’s 113.33. The spread between the IYY closing price and the moving average widened to +3.7% this week from +3.36% a week ago. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week with clear separation with this signal line to the downside. Therefore, for the fourth week in a row, this indicator is bearish. The MACD of IYY stands at +0.205 while the signal line is at +0.305. As long as the MACD ends the week with clear downside separation with the signal line, this indicator will remain bearish. If the MACD were to end the week above its signal line with meaningful separation, this would trigger a new bullish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 59.12, up from 46.92 at the close of last week. The signal for this indicator will remain bearish until August 25, 2017. If there is not a confirming bearish signal before then, the signal will go “stale” on that date and revert to neutral. A confirming bearish signal would occur if the indicator were to rise above the 75% level and fall back below it. This would push the “stale date” back six months from the date of the confirming bearish signal. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 65.59, up slightly from last week’s reading of 65.11. This indicator will remain bearish until August 25, 2017, on which date the signal with go “stale” and revert to neutral. The “stale date” would be pushed back if a confirming bearish signal was generated before that date. This would happen if the indicator rose above the 70% bearish threshold and then started to decline. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing bullish signals this week. Therefore, the signal for this composite indicator has changed from bearish to bullish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. $NASI crossed over its moving average this week and remained above it at week’s end. This bullish crossover triggered a new BULLISH signal for this component indicator. $NASI ended the week at +4.92 versus the moving average at -31.07. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line ended the week above the signal line with “meaningful” separation between the two after crossing above it on Friday. This bullish crossover triggered a new bullish signal for this component indicator. The MACD of $NASI is -73.217 while the signal line is -78.014. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bullish as long as the two component indicators are both flashing bullish signals. The indicator would trigger a new bearish signal if the two component indicators are both flashing bearish signals. A new neutral signal would occur if the two component indicators are not in agreement.
  • AAII Investor Bullish Sentiment fell 5.1-percentage points this week to 30.2%. This indicator will remain bullish until May 17, 2017. If there is not another confirming bullish signal before then, the current bullish signal will go “stale” and revert to neutral. A confirming bullish signal would occur if the reading falls below 25% and then climbs back above it. If there is a confirming bullish signal before May 17, 2017, the “stale date” would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls back below it.

For the week ended March 31, 2017, three CI Market Dashboard indicators are bullish, three are neutral and three are bearish.

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3/24/2017

Author: Wayne A. Thorp, CFA

Weekly Market Summary

Politics took center stage this week in the hearts and minds of investors and traders as House Republicans tried, and failed, to pass a replacement for the Affordable Care Act, also known as Obamacare. After postponing the vote on Thursday, House Republicans received an ultimatum from President Trump to vote or move on. Shortly before the vote was to take place on Friday, Speaker Ryan once again postponed the vote, knowing he did not have the votes to dismantle Obamacare.

The markets have been propelled over the last few months, in large part, by the optimism of policy changes a Trump presidency could bring about. However, this optimism needs legislative action to continue, and this week should that confidence. If Republicans cannot coalesce around a key campaign promise—repealing Obamacare—how likely are Trump’s other key legislative items, namely deregulation, tax reform and stimulus spending to succeed.

Many analysts have warned that the market is “priced to perfection” and that that Trump will achieve his goals. However, that likelihood became much more uncertain this week and the market reacted accordingly: U.S. stocks turned in their weakest weekly performance since before the November presidential election.

The Dow Jones Industrial Average (DJIA) fell 1.5% this week to close at 20,596.72, having fallen in seven consecutive sessions. This was the Dow’s poorest weekly showing since September, according to Schaeffer’s Investment Research. The index resounding broke below the 20,750 level on Tuesday, which we were looking to for initial support. The 20,500 level held the latter part of this week and the 50-day moving average is nearby at 20,449.29.

The S&P 500 Index (SPX) turned in its biggest weekly loss since November, falling 1.2% this week to 2,343.98. The index fell through support around 2,375 but did find footing later in the week around 2,340. Below that is the 50-day moving average at 2,330.56.

This week, only two of the 10 S&P Sector SPDRs posted gains as sector rotation showed a flight to safety. Utilities (XLU) and Real Estate (XLRE) were the only winners for the week, adding 1.3% and 0.8%, respectively. Financials (XLF) once again lagged all other sectors this week, losing 3.7% on worries that deregulation and tax reform will not come to pass.

The broad market Wilshire 5000 (W5000) index lost 1.6% this week and closed on Friday at 24,377.29. This index fell through support at 24,500 but bounced off the 50-day moving average, which is currently at 24,318.73. Below that is possible round-number support at 24,000.

The tech-heavy Nasdaq Composite (COMP) had its worst week since December, posting a 1.2% loss this week to end at 5,828.74. The index fell through round-number support at 5,900 but appears to have found near-term footing around 5,790. Below that is the 50-day moving average at 5,753.01.

The Russell 2000 (RUT) index of smaller stocks slid 2.7% this week in another sign of a risk-off mentality in the market. The index closed the week at 1,354.64. As we predicted, the index broke below its 50-day moving average on Tuesday but stabilized around 1,340 so we will wait to see if that support level holds in the near term.

The CBOE Volatility Index (VIX) jumped 14.9% this week to close at 12.96, its highest level since December 30.

Computerized Investing Market Dashboard Indicators

This week, none of the CI Market Dashboard Indicators changed their signals. In addition, none of the Dashboard indicators triggered confirming bearish or bullish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) lost 2.0% this week to close at 117.14. However, for the 20th week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at 113.33, up from last week’s 113.22. The spread between the IYY closing price and the moving average narrowed to +3.36% this week from +5.5% a week ago. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain BULLISH. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week with clear separation with this signal line to the downside. Therefore, for the third week in a row, this indicator is bearish. The MACD of IYY stands at +0.224 while the signal line is at +0.569. As long as the MACD ends the week with clear downside separation with the signal line, this indicator will remain bearish. If the MACD were to end the week above its signal line with meaningful separation, this would trigger a new bullish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 46.92, down from 57.59 at the close of last week. The signal for this indicator will remain bearish until August 25, 2017. If there is not a confirming bearish signal before then, the signal will go “stale” on that date and revert to neutral. A confirming bearish signal would occur if the indicator were to rise above the 75% level and fall back below it. This would push the “stale date” back six months from the date of the confirming bearish signal. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 65.11, down from 67.46 a week ago. This indicator will remain bearish until August 25, 2017, on which date the signal with go “stale” and revert to neutral. The “stale date” would be pushed back if a confirming bearish signal was generated before that date. This would happen if the indicator fell below the 70% bearish threshold, crossed above it and then started to decline. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing bearish signals this week. Therefore, for the third consecutive week, this composite indicator is bearish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. $NASI once again ended the week below its moving average, which is bearish for this component indicator. $NASI ended the week at -85.33 versus the moving average at -49.91. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line ended the week below the signal line with “meaningful” separation between the two, which is also bearish for this component indicator. The MACD of $NASI is -89.129 while the signal line is -69.024. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bearish as long as the two component indicators are both flashing bearish signals. The indicator would trigger a new bullish signal if the two component indicators are both flashing bullish signals. A new neutral signal would occur if the two component indicators are not in agreement.
  • AAII Investor Bullish Sentiment climbed 4.1-percentage points this week to 35.3%. This indicator will remain bullish until May 17, 2017. If there is not another confirming bullish signal before then, the current bullish signal will go “stale” and revert to neutral. A confirming bullish signal would occur if the reading falls below 25% and then climbs above it. If there is a confirming bullish signal before May 17, 2017, the “stale date” would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended March 24, 2017, two CI Market Dashboard indicators are bullish, three are neutral and four are bearish.

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3/17/2017

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The biggest story-non-story of the week was the Federal Reserve’s announcement that it was raising its benchmark interest rate by 25 basis points (0.25%) to the range of 0.75% to 1.0%. This was the third interest rate hike in a decade, but the second since December. This seems to signal that the Federal Reserve is moving into a new policy phase, exiting its nine-year-old campaign of economic stimulus following the economic crisis of 2007-2008. The central bank also maintained its forecast for two additional increases by the end of the year. The consensus immediately after the announcement was for an increase during the June FOMC meeting and another when the committee meets in December. Through Friday’s close, the CME FedWatch Tool pegged the probability of a May rate increase at only 6.4%, while the probably of a June increase was 58.2%.

In the near term, the rate increase itself will probably have little impact on the overall stock market. However, some sectors do benefit from interest rate hikes. One sector that tends to benefit the most is the financial industry. The earnings of banks, brokerages, mortgage companies and insurance companies often increase as interest rates move higher because they can charge more for lending. Overall, though, the rate increase is an indication of the Fed’s confidence in the overall economy.

The Dow Jones Industrial Average (DJIA) clawed out a 0.06% weekly win and closed Friday at 20,914.62. It has been 10 trading days since the Dow closed above the 21,000 level and we wonder if this has turned into a near-term resistance point. To the downside, the 20,750 level may offer support, followed by the 50-day moving average at 20,370.73.

The S&P 500 Index (SPX) gained 0.2% for the week to close at 2,378.25. It has been 12 days since the large-cap index traded above the 2,400 level, leaving us to believe that has become a near-term hurdle. To the downside, we see the 2,375 level as near-term support, followed by the 50-day moving average at 2,322.62.

This week, five of the 10 S&P Sector SPDRs posted gains while five posted losses. Real Estate (XLRE) outpaced all sectors with a 1.2% gain as investors shifted money into dividend-paying stocks as the Fed signaled interest rates could stay low for longer than expected, even though it increased rates this week. As a result, Financials (XLF) lagged all sectors with a 1.4% decline.

The broad market Wilshire 5000 (W5000) index again posted a weekly gain of 0.5% to close Friday at 24,761.64. We view the 24,500 level as near-term support for the index, followed by the 50-day moving average at 24,252.40 and round-number support at 24,000.

The tech-heavy Nasdaq Composite (COMP) rose 0.6% this week to 5,901.00. On Friday, the index posted a new all-time intra-day high at 5,912.61. We wait to see if round-number support develops at 5,900notched its sixth consecutive weekly win after rising 0.4% for the week to 5,870.75. The index eased off Wednesday’s record close on Thursday and we will watch to see if the 5,900 level becomes short-term resistance. Below that is the possibility of round-number support at 5,800 and the 50-day moving average at 5.722.87.

The Russell 2000 (RUT) index of smaller stocks outperformed most major U.S. indexes this week, posting a 1.9% gain to close at 1,391.52. It has been 12 trading days since the index traded above the 1,400 mark so we continue to view that as a near-term resistance point. To the downside, we do not have much faith in the 50-day moving average (1,376.60) after it failed to hold last week. However, the 1,360 level offered support last week so we view that as near-term support.

The CBOE Volatility Index (VIX) slid 3.3% this week to 11.28.

Computerized Investing Market Dashboard Indicators

Since the last update two weeks ago, two of the Market Dashboard indicators have triggered new bearish signals, one switching from neutral and the other from bullish. However, none of the Dashboard indicators triggered confirming bearish or bullish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) gained 0.4% this week to close at $119.47. For the 19th week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at 113.22. The spread between the IYY closing price and the moving average now stands at +5.5%. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week with clear separation with this signal line to the downside. Since the last update, the MACD crossed below its signal line and has remained there. Therefore, this indicator has triggered a new bearish signal since the last update. The MACD of IYY stands at +0.788 while the signal line is at +0.918. As long as the MACD ends the week with clear downside separation with the signal line, this indicator will remain BEARISH. If the MACD were to end the week above its signal line with meaningful separation, this would trigger a new bullish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 57.59, up from last week’s reading of 49.549. The signal for this indicator will remain bearish until August 25, 2017. If there is not a confirming bearish signal before then, the signal will go “stale” on that date and revert to neutral. A confirming bearish signal would occur if the indicator were to rise above the 75% level and fall back below it. This would push the “stale date” back six months from the date of the confirming bearish signal. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 67.46, up slightly from last week’s 67.386. This indicator will remain bearish until August 25, 2017, on which date the signal with go “stale” and revert to neutral. The “stale date” would be pushed back if a confirming bearish signal was generated before that date. This would happen if the indicator fell below the 70% bearish threshold, crossed above it and then started to decline. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing bearish signals this week. Since the last update, this composite indicator has triggered a new BEARISH signal, switching from bullish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. $NASI closed the week below its moving average, which is bearish for this component indicator. $NASI ended the week at +20.46 versus the moving average at +37.57. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line ended the week below the signal line with “meaningful” separation between the two. Since the last update, the MACD has made a bearish crossover of its signal line, thereby triggering a new bearish signal for this component indicator. The MACD of $NASI is -69.865 while the signal line is -40.922. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bearish as long as the two component indicators are both flashing bearish signals. The indicator would trigger a new bullish signal if the two component indicators are both flashing bullish signals. A new neutral signal would occur if the two component indicators are not in agreement.
  • AAII Investor Bullish Sentiment ticked upward 1.2-percentage points this week to 31.2%. This indicator will remain bullish until May 17, 2017. If there is not another confirming bullish signal before then, the current bullish signal will go “stale” and revert to neutral. A confirming bullish signal would occur if the reading falls below 25% and then climbs above it. If there is a confirming bullish signal before May 17, 2017, the “stale date” would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended March 17, 2017, two CI Market Dashboard indicators are bullish, three are neutral and four are bearish.

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3/3/2017

Author: Wayne A. Thorp, CFA

Wayne A. Thorp, CFA, will be speaking to the Baton Rouge, LA AAII Local Chapter on Saturday, March 3. If you are in the area, come hear him talk about stock selection and stock valuation. Because of Wayne's travel schedule, next weekend’s CI Market Dashboard update will be delayed.

 

Weekly Market Summary

President Trump, the economy and the Federal Reserve played pivotal roles in the U.S. stock market this week. Stocks were basically flat to start the week in anticipation of Trump’s first address to a joint session of Congress. A slightly disappointing gross domestic product reading cooled stocks on Tuesday, but they came roaring back on Wednesday. Some analysts believe it was a positive reaction to the president’s Tuesday night speech, in which he again promised major policy changes, including tax reform and an increase in infrastructure spending. Others believe that this was merely a “short squeeze” as short-sellers covered their positions to stop mounting losses in the face of the market’s latest rally. At the end of the week, Wall Street digested a host of speeches from Fed officials, with most striking hawkish tones regarding future interest rate increases. On Friday, four officials stepped to the mic, including Fed Chair Janet Yellen and Vice Chair Stanley Fischer. Yellen confirmed the central bank could adjust interest rates at the FOMC meeting later this month “if employment and inflation are continuing to evolve in line with our expectations.” As of Friday’s close, the CME Group’s FedWatch Tool placed at the probability of a March rate increase at 79.9%, up from 26.6% a week ago and up from 77.5% on Thursday.

The Dow Jones Industrial Average (DJIA) added 0.9% this week to close at 21,005.71. Tuesday saw the index’s streak of record closings end at 12. If the blue-chip index had posted a gain on Tuesday, this would have set the longest streak in its 120-year history. Instead, it had to settle on matching the record for the shortest period to move 1,000 points from one millennium number to the next, according to The Wall Street Journal. It took 24 trading days—from January 25 to March 1, for the index to climb from 20,000 to 21,000, matching the time it took to move from 10,000 to 11,000 in 1999. However, this 1,000-point move was only 5% compared to the 10% move back in 1999. The index has now closed above 21,000 for three consecutive days, although it has not moved much since clearing the threshold. We will have to wait to see if 21,000 becomes a support level. Below that is the 50-day moving average at 20,169.53. For February, the Dow added 4.8%, its best monthly gain since November.

The S&P 500 Index (SPX) advanced 0.6% this week to 2,383.12. This was the large-cap indexes sixth consecutive weekly gain. After gapping upward on Wednesday, and breaking through a minor resistance level, we will wait to see if that gap offers support to the downside around 2,370 – 2,375. Below that is round-number support around 2,300 as well as the 50-day moving average at 2,299.98. For the month, the S&P 500 climbed 3.7% for its best month since March 2016. This is also the first time the index has posted gains in both January and February since 2013.

This week, three of the 10 S&P Sector SPDRs posted losses, as Real Estate (XLRE) lagged all sectors with a 0.7% decline. Consumer Staples (XLP) and Utilities (XLU) were also down for the week. Financials (XLF) jumped 2.3% for the week in anticipation of rising interest rates. The Technology (XLK) sector ticked upward 0.4% for the week. For the month of February, Health Care (XLV) was the strongest sector, adding 6.3%, followed by Utilities (XLU) and Financials (XLF), which both advanced 5.3%. The sole sector that was down for the month was Energy (XLE), which fell 2.1%. The Technology sector (XLK) was up 4.5% in February.

The broad market Wilshire 5000 (W5000) index again posted a weekly gain of 0.5% to close Friday at 24,819.01. The index gapped above previous resistance at 24,750 on Wednesday, moving above 25,000 on an intraday basis for the first tie but failing to close above this round-number milestone. The index did set a record close on Wednesday at 24,960.78. We will watch to see if 25,000 become a short-term resistance level. To the downside, there may be support where there was previously resistance around 24,750. Below that is round-number support at 24,000 and the 50-day moving average at 24,046.51. For February, the Wilshire 5000 posted a 3.2% gain.

The tech-heavy Nasdaq Composite (COMP) also notched its sixth consecutive weekly win after rising 0.4% for the week to 5,870.75. The index eased off Wednesday’s record close on Thursday and we will watch to see if the 5,900 level becomes short-term resistance. We look for round-number support at 5,800 and below that is the 50-day moving average at 5,640.01. The index advanced 3.8% in February, giving it its first four-month winning streak for the first time since 2013.

The Russell 2000 (RUT) index of smaller stocks was flat this week, ticking downward by 0.03%, again adding to the speculation that current rally may be confined to larger stocks and not the broader market. The index now stands at 1,394.13. We continue to wonder if the 1,400 mark is becoming a resistance point, as the index traded above it for three consecutive days this week but was never able to close above 1,400. To the downside, the 50-day moving average (1,375.84) has been a reliable floor over the last several weeks. For the month the Russell 2000 gained 1.8%, lagging its larger-cap cousins.

The CBOE Volatility Index (VIX) fell 4.4%% this week to 10.96. For February, the “fear gauge” added 7.8%.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new neutral signal, switching from bullish. However, none of the Dashboard indicators triggered confirming bearish or bullish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) gained 0.6% for the second consecutive week to close at $119.55. This is only $0.01 off the record close it set on Thursday. For the month of February, the ETF added 3.7%. For the 17th week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at 111.95, up from 111.34 at the end of last week. The spread between the IYY closing price and the moving average now stands at +6.78%, up slightly from +6.72% a week ago. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.1
  • The MACD of IYY ended the week with clear separation with this signal line to the upside. Therefore, this indicator remains bullish for the fourth consecutive week. The MACD of IYY stands at +1.337 while the signal line is at +1.265. As long as the MACD ends the week with clear upside separation with the signal line, this indicator will remain bullish. If the MACD was to end the week below its signal line with meaningful separation, this would trigger a new bearish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 66.82, down from last week’s reading of 69.916. The signal for this indicator will remain bearish until August 25, 2017. If there is not a confirming bearish signal before then, the signal will go “stale” on that date and revert to neutral. A confirming bearish signal would occur if the indicator were to rise above the 75% level and fall back below it. This would push the “stale date” back six months from the date of the confirming bearish signal. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 70.72, down a tick from last week’s 71.36. This indicator will remain bearish until August 25, 2017, on which date the signal with go “stale” and revert to neutral. The “stale date” would be pushed back if a confirming bearish signal was generated before that date. This would happen if the indicator fell below the 70% bearish threshold, crossed above it and then started to decline. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing contradictory signals this week. Therefore, this composite indicator has triggered a new neutral signal this week, switching from bullish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI closed below its moving average and remained there at week’s end. This bearish crossover triggered a new bearish signal for this component indicator. $NASI ended the week at +306.51 versus the moving average at +327.02. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD line remained above the signal line with “meaningful” separation between the two, although the gap has narrowed considerably over the last several trading sessions. This is bullish for this component indicator. The MACD of $NASI is +21.891 while the signal line is +17.448. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain neutral as long as the two component indicators are not in agreement. The indicator would trigger a new bearish signal if the two component indicators are both flashing bearish signals. A new bullish signal would occur if the two component indicators are both flashing bullish signals
  • The AAII Investor Bullish Sentiment dipped 0.6-percentage points this week to 37.9%. This indicator will remain bullish until May 17, 2017. If there is not another confirming bullish signal before then, the current bullish signal will go “stale” and revert to neutral. A confirming bullish signal would occur if the reading falls below 25% and then climbs above it. If there is a confirming bullish signal before May 17, 2017, the “stale date” would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended March 3, 2017, three CI Market Dashboard indicators are bullish, four are neutral and two are bearish.

Start the Discussion!






2/24/2017

Author: Wayne A. Thorp, CFA

Weekly Market Summary

U.S. indexes continued their upward march this week, although there may be some indications that the momentum generated by rhetoric from President Trump may need actual policy statements for it to continue. Traders will be watching the President’s address to Congress on Tuesday for more details about his agenda. The Dow Jones Industrial Average ended the week on an 11-day winning streak, the first time this has happened since 1987, according to Schaeffer’s Investment Research. However, the Nasdaq Composite notched its first back-to-back losses of 2017. It also is becoming more likely that the Fed will hike interest rates in March after the Federal Open Market Committee (FOMC) minutes from its latest meeting indicated that “many” members support a rate increase “fairly soon.” However, as of Friday’s close, the CME Group’s FedWatch Tool placed at the probability of a March rate increase at only 26.6%, up from 22.1% the previous day.

The Dow Jones Industrial Average (DJIA) ended the week on an 11-day winning streak, thanks to a late-session rally on Friday after spending most of the day in negative territory. The blue-chip index ended the week at 20,821.76, yet another record close, after adding 1%. Initial support may develop around 20,500, followed by the possibility of round-number support at 20,000. The 50-day moving average is also around that area, currently at 20,059.70.

The S&P 500 Index (SPX) also registered a new all-time high close on Friday after adding 0.7% for the week to 2,367.34. This was also the fifth consecutive weekly win for the large-cap index. We wonder is the 2,370 level may offer some near-term resistance for the index. To the downside, we are waiting to see if support develops around 2,300 – 2,325, which served as the upper bounds of the former trading range for the index. There is also the 50-day moving average, which now stands at 2,288.25.

This week, two of the 10 S&P Sector SPDRs posted losses, as Financials (XLF) and Energy (XLE) fell 0.2% and 1.4%, respectively. Utilities (XLU) were the big winners, jumping 4.1%. Real estate (XLRE) also gained 2.2%. The Technology (XLK) sector added 0.8% for the week.

The broad market Wilshire 5000 (W5000) index climbed 0.5% this week to close at 24,689.93, 0.24% off the record close it set on Tuesday. The performance of the index indicates that the rally in U.S. stocks this week was mainly confined to larger stocks. We are also wondering if the 24,750 level may offer near-term resistance. Initial downside support may come around 24,500, followed by round-number support at 24,000 and the 50-day moving average at 23,930.73.

The tech-heavy Nasdaq Composite (COMP) finished the week at 5,845.31 for its fifth straight weekly advance after ticking upward 0.2%. As we mentioned earlier, the index recorded its first consecutive losing days of the year this week and is 0.52% below the record close it set on Tuesday. We look for round-number support at 5,800, although the 5,600 level is more compelling as it is also near the 50-day moving average at 5,598.58.

The Russell 2000 (RUT) index of smaller stocks fell 0.4% this week, again indicating that the rally may be starting to lose steam among rank-and-file stocks. The index now stands at 1,394.52. We continue to wonder if the 1,400 mark is becoming a resistance point. To the downside, the 50-day moving average (1,372.52) has been a reliable floor over the last several weeks.

The CBOE Volatility Index (VIX) ticked downward 0.2% this week to 11.47.

Computerized Investing Market Dashboard Indicators

This week, none of the Market Dashboard indicators triggered a change in signal. However, two of the Dashboard indicators triggered confirming bearish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) gained 0.6% this week to close at $118.82. For the sixteenth week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at 111.34, up from $110.90 a week ago. The spread between the IYY closing price and the moving average now stands at +6.72%, up from +6.55% at the close of last week. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week with clear separation with this signal line to the upside. Therefore, this indicator remains bullish for the third consecutive week. The MACD of IYY stands at +1.303 while the signal line is at +1.12. As long as the MACD ends the week with clear upside separation with the signal line, this indicator will remain bullish. If the MACD were to end the week below its signal line with meaningful separation, this would trigger a new bearish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 71.56, a tick upward from last week’s reading of 71.351. On Tuesday of this week, the indicator closed above the 75% bearish threshold at 75.219. The following day, it closed below it, thereby triggering yet another confirming bearish signal. The signal for this indicator will remain bearish for six months until August 25, 2017. If there is not another confirming bearish signal before then, the signal will go “stale” on that date and revert to neutral. A confirming bearish signal would occur if the indicator were to rise above the 75% level and fall back below it. This would push the “stale date” back six months from the date of the confirming bearish signal. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 71.36, a tick downward from last week’s reading of 72.0. This week the reading saw its first daily decline since crossing over the 70% bearish threshold on Wednesday, February 8. As a result, this indicator triggered a confirming bearish signal. This indicator will remain bearish until August 25, 2017, on which date the signal with go “stale” and revert to neutral. The “stale date” would be pushed back if another confirming bearish signal was generated before that date. This would happen if the indicator fell below the 70% bearish threshold, crossed above it and then started to decline. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are both flashing bullish signals this week. Therefore, this composite indicator remains bullish for the second consecutive week. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI closed above its moving average with meaningful separation between the two. This is bullish for this component indicator. $NASI ended the week at +354.19 versus the moving average at +341.8. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD line remained above the signal line with meaningful separation between the two. This is also bullish for this component indicator. The MACD of $NASI is +22.751 while the signal line is +2.867. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bullish as long as the two component indicators are both flashing bullish signals. The indicator would trigger a new bearish signal if the two component indicators are both flashing bearish signals. A new neutral signal would be triggered if the two component indicators are not in agreement.
  • The AAII Investor Bullish Sentiment climbed 5.4-percentage points this week to 38.5%. This indicator will remain bullish until May 17, 2017. If there is not another confirming bullish signal before then, the current bullish signal will go “stale” and revert to neutral. A confirming bullish signal would occur if the reading falls below 25% and then climbs above it. If there is a confirming bullish signal before May 17, 2017, the “stale date” would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended February 24, 2017, four CI Market Dashboard indicators are bullish, three are neutral and two are bearish.

Start the Discussion!






2/17/2017

Author: Wayne A. Thorp, CFA

Weekly Market Summary

Renewed promises from President Trump of a new tax plan and generally positive economic and earnings data sent U.S. stocks upward again this week. In fact, this week the Dow Jones Industrial Average (DJIA), S&P 500 and Nasdaq Composite notched intraday highs in each of the last six sessions. According to Schaeffer’s Investment Research, this is only the second time this has ever happened dating back to 1972. The first time? Two months before Black Monday in 1987. Given the small sample size, this is merely a historical footnote and not an overall market warning.

The U.S. markets will be closed on Monday in observance of (George) Washington’s Birthday, more widely known as President’s Day.

The Dow Jones Industrial Average (DJIA) ended the week on a seven-day winning streak, notching another record closing high. After gaining 1.7% for the week, the blue-chip index closed Friday at 20,624.05. It’s too soon to tell whether round-number support materializes at the 20,000 mark, but just below it is also the 50-day moving average at 19,997.04.

The S&P 500 Index (SPX) also registered a new all-time high close on Friday after adding 1.5% for the week to 2,351.16. We are waiting to see if support develops around 2,300 – 2,325, which served as the upper bounds of the former trading range for the index. There is also the 50-day moving average, which now stands at 2,279.14.

Once again this week all but one of the 10 S&P Sector SPDRs posted gains. Energy (XLE) was the sole loser, ticking downward 1.8%. Financials (XLF) posted the biggest weekly gain on expectations of rising interest rates, climbing 2.9%. Health Care (XLV) was close behind with a 2.5% weekly gain. The Technology (XLK) sector added 1.7% for the week.

The broad market Wilshire 5000 (W5000) index added 1.3% this week to close at 24,571.56, yet another all-time record high close. We are still waiting to see if round-number support develops at 24,000. Below that is the 50-day moving average at 23,842.48.

The tech-heavy Nasdaq Composite (COMP) finished the week at 5,838.58 after climbing 1.8%. This, too, is an all-time record close for the index. It is too early to tell if round-number support will develop at 5,800 or even 5,700, although the latter was near the upper bound of the most recent trading range so former resistance may turn into support there. There is also the 50-day moving average at 5,563.80.

The Russell 2000 (RUT) index of smaller stocks added 0.8% for the second consecutive week to 1,399.86. This is just shy of the all-time record close of 1,404.21 set on Wednesday. We will be interested in seeing if the 1,400 mark offers any resistance moving forward. To the downside, the 50-day moving average (1,370.69) has been a reliable floor over the last several weeks.

The CBOE Volatility Index (VIX) fell 5.9% this week to 10.85.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new bullish signal, switching from neutral. In addition, one of the Dashboard indicators triggered a confirming bearish signal.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) gained 1.5% this week to close at a new all-time record close of $118.16. For the fifteenth week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $110.90, up from last week’s $110.39. The spread between the IYY closing price and the moving average now stands at +6.55%, up from +5.44% a week ago. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain BULLISH. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week with clear separation with this signal line to the upside. Therefore, this indicator remains bullish for the second consecutive week. The MACD of IYY stands at +1.142 while the signal line is at +0.886. As long as the MACD ends the week with clear upside separation with the signal line, this indicator will remain BULLISH. If the MACD were to end the week below its signal line with meaningful separation, this would trigger a new bearish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 71.35, down from last week’s reading of 74.17. On Monday of this week, the indicator closed above the 75% bearish threshold at 75.073. The following day, it closed below it, thereby triggering a confirming bearish signal. The signal for this indicator will remain bearish for six months until August 18, 2017. If there is not another confirming bearish signal before then, the signal will go “stale” on that date and revert to neutral. A confirming bearish signal would occur if the indicator were to rise above the 75% level and fall back below it. This would push the “stale date” back six months from the date of the confirming bearish signal. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.5
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 72.0, up from 70.62 at the close of last week. This indicator remains bearish. This indicator will remain bearish until July 14, 2017, on which date the signal with go “stale” and revert to neutral. This indicator last triggered a bearish confirming signal on January 13, 2017, after it climbed above the 70% bearish threshold and then started to fall. While the current reading is still above 70%, it would not trigger another bearish confirming signal until it first fell below 70%, at which point if it was to rise back above 70% and then start to fall, it would trigger a new confirming bearish signal. If this was to happen, the “stale date” would also be pushed forward six months. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are both flashing bullish signals this week. Now that both component indicators are flashing agreeing signals, this composite indicator triggered a new bullish signal. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI closed above its moving average with meaningful separation between the two. This is BULLISH for this component indicator. $NASI ended the week at +324.87 versus the moving average at +278.04. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD line climbed above the signal line and remained there at week’s end. This bullish crossover triggered a new bullish signal for this component indicator. The MACD of $NASI is -2.228 while the signal line is -17.436. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bullish as long as the two component indicators are both flashing bullish signals. The indicator would trigger a new bearish signal if the two component indicators are both flashing bearish signals. A new neutral signal would be triggered if the two component indicators are not in agreement.
  • The AAII Investor Bullish Sentiment fell 2.7 percentage points this week to 33.1%. This indicator will remain bullish until May 17, 2017. If there is not another confirming bullish signal before then, the current bullish signal will go “stale” and revert to neutral. A confirming bullish signal would occur if the reading falls below 25% and then climbs above it. If there is a confirming bullish signal before May 17, 2017, the “stale date” would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended February 17, 2017, four CI Market Dashboard indicators are bullish, three are neutral and two are bearish.

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2/10/2017

Author: Wayne A. Thorp, CFA

Wayne A. Thorp, CFA, will be speaking to the Los Angeles AAII Local Chapter on Saturday, February 18. Due to his travel schedule, the CI Market Dashboard update may be delayed.

 

Weekly Market Summary

Fiscal and monetary policy, as well as employment data, guided the market this week. Comments from President Donald Trump promising the release of a “phenomenal” tax announcement in the next “two or three weeks” sent shares soaring to new all-time highs on Thursday and carried over to Friday. In addition, St. Louis Fed President James Bullard eased concerns about pending interest rate increases while Chicago Fed President Charles Evens spoke in favor of gradual interest rate hikes. Lastly, the market responded favorably to a surprise decline in weekly jobless claims, with just 234,000 people filing for unemployment benefits last week, compared to estimates of 250,000, according to Schaeffer’s Investment Research.

The Dow Jones Industrial Average (DJIA) ended the week at a new all-time high close. For the week, the blue-chip index gained 1% and closed at 20,269.37. We still need to see if the 20,000 level can be relied upon for support. Below that is the 50-day moving average, which is currently at 19,834.67.

The S&P 500 Index (SPX) also registered a new all-time high close on Friday after adding 0.8% for the week to 2,316.10. The large-cap index once again broke out of the trading range in which it had been moving for the last several weeks and we wait to see if support develops around 2,300, the former upper range of the trading channel. If not, then we look at the 50-day moving average (2,264.85) as well as the 2,250 level for support.

This week all but one of the 10 S&P Sector SPDRs posted gains. Energy (XLE) was the sole loser, ticking downward 0.2% on expectations for further growth in U.S. crude production, which would boost supply. Industrials (XLI) posted the biggest gain for the week, up 1.7%, followed by Consumer Discretionary (XLY) with its 1.5% gain. The Technology (XLK) sector added 1.2% for the week.

The broad market Wilshire 5000 (W5000) index climbed 0.8% this week to 24,248.91, marking yet another all-time high close. We are still waiting to see if round-number support develops at 24,000. Below that, the 23,600 to 23,700 range may offer support moving forward, as well as the 50-day moving average at 23,695.12.

The tech-heavy Nasdaq Composite (COMP) finished the week up 1,2% to 5,734.13, a new all-time-high-close. We will wait to see if round-number support materializes at 5,700. Just below that is the 5,675 to 5,700 range that had served as the upper range of the previous trading channel.

The Russell 2000 (RUT) index of smaller stocks added 0.8% this week to close at 1,388.84, also a new all-time high close. We are anxious to see if the index can stay above its trading range of the last several weeks. If so, support could develop around the 1,380 to 1,385 range. The index continued to flirt with its 50-day moving average this week and actually closed below it on Wednesday before moving back above it on Thursday and gapping upward on Friday. The average stands at 1,363.66 and we look at it for support as well.

The CBOE Volatility Index (VIX) dipped 1.1% this week to 10.85.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new bullish signal, switching from bearish, while another triggered a new neutral signal, switching from bearish. However, none of the Dashboard indicators triggered bullish or bearish confirming signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) gained 0.9% this week to notch a new all-time high close of $116.39. For the fourteenth week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $110.39, up from $109.91 a week ago. The spread between the IYY closing price and the moving average now stands at +5.44%, up from last week’s +4.9%. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week with clear separation with this signal line to the upside. This week, the MACD of IYY moved above its signal line and remained below it at week’s end. This bullish crossover triggered a new bullish signal for this indicator. This is the third signal change in as many weeks. When the market is moving in a sideways manner as it has since the start of the year, it is not uncommon to see such “whipsaws" in trend-following indicators such as MACD. The MACD of IYY stands at +0.691 while the signal line is at +0.612. As long as the MACD ends the week with clear upside separation with the signal line, this indicator will remain bullish. If the MACD were to end the week below its signal line with meaningful separation, this would trigger a new bearish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 74.17, up from 72.49 at last week’s close. The signal for this indicator will remain bearish until July 28, 2017. If there is not another confirming bearish signal before then, the signal will go “stale” on that date and revert to neutral. A confirming bearish signal would occur if the indicator were to rise above the 75% level and fall back below it. This would push the “stale date” back six months from the date of the confirming bearish signal. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 70.62, down slightly from last week’s reading of 70.92. This indicator will remain bearish until July 14, 2017, on which date the signal with go “stale” and revert to neutral. However, if there is a bearish confirming signal before then, whereby the reading rises above the 70% bearish threshold and then starts to fall, the “stale date” will be pushed forward six months. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing conflicting signals this week. Therefore, this composite indicator has triggered a new neutral signal this week. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI crossed above the moving average and created meaningful space above it by the end of the week. This bullish crossover triggered a new bullish signal for this component indicator. $NASI ended the week at +188.06 versus the moving average at +181.87. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line ended the week below the signal line, which is bearish for this component indicator. The MACD of $NASI is -33.015 while the signal line is -24.614. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain neutral as long as the two component indicators are not in unison. This composite indicator would trigger a new bullish signal if the two component indicators are both flashing bullish signals. The indicator would trigger a new bearish signal if the two component indicators are both flashing bearish signals.
  • The AAII Investor Bullish Sentiment climbed 3.0 percentage points this week to 35.8%. This indicator will remain bullish until May 17, 2017. If there is not another confirming bullish signal before then, the current bullish signal will go “stale” and revert to neutral. A confirming bullish signal would occur if the reading falls below 25% and then climbs above it. If there is a confirming bullish signal before May 17, 2017, the “stale date” would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended February 10, 2017, three CI Market Dashboard indicators are bullish, four are neutral and two are bearish.

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2/3/2017

Author: Wayne A. Thorp, CFA

Weekly Market Summary

Investor optimism waned this week following several controversial executive orders from President Trump. Chief among them was a move to restrict immigration from seven majority-Muslim countries, which sent airline and technology stocks falling. The technology industry decried the Trump administration's temporary travel ban, expressing concerns about the effects the restrictions would have on their employees and their ability to recruit from abroad. However, the market did rebound on Friday following better-than-expected jobs data and President Trump’s executive order aimed at cutting back regulations on the banking industry.

The Dow Jones Industrial Average (DJIA) slipped 0.1% this week but managed to regain the ground above 20,000 on Friday after falling below it on Monday. At this point, we cannot rely on the 20,000 mark for meaningful support. Instead, we look to the 19,700 to 19,750 range for support, followed by the 50-day moving average, which is currently at 19,731.47.

The S&P 500 Index (SPX) gained 0.1% this week to close at 2,297.42. At the start of the week, the index fell back into the trading channel it had been moving in for several weeks but climbed out of it on Friday. We are anxious to see if the index is able to move clear of this trading range. This week showed that we cannot look for support at the 2,280 level. So, instead, we look to the 2,250 level for support as well as the 50-day moving average at 2,255.31.

This week six of the 10 S&P Sector SPDRs posted gains. Health Care (XLV) was the biggest winner, tacking on 2.4%. The Energy (XLE), Industrials (XLI) and Materials (XLB) industries all slid more than 1% this week. The Technology (XLK) sector ticked downward by 0.1% for the week.

The broad market Wilshire 5000 (W5000) climbed 0.2% this week to 24,071.46, marking yet another all-time high close. The index fell back into the trading range in which it had been trading for the last several weeks before working its way out of it on Friday. At this time, we cannot rely on the 24,000 level to offer round-number support. We will wait to see if that turns into support moving forward. The 23,600 to 23,700 range may offer support moving forward, as well as the 50-day moving average at 23,595.33.

The tech-heavy Nasdaq Composite (COMP) also gained 0.1% this week to close at 5,666.77, a new all-time-high close. The 5,575 level did not materialize as support this week, although the index was able to climb back above it on Friday. Instead, we will look for round-number support at 5,600 and 5,500 as well as the 50-day moving average at 5,481.76.

The Russell 2000 (RUT) index of smaller stocks added 0.5% this week to close at 1,377.84. The index flirted with its 50-day moving average for much of the week, but for the most part, it held. The average stands at 1,360.22 and we look to it for initial support. If it does hold as the lower bound, the trading range will keep getting compressed if resistance around 1,390 holds. At some point, something will have to give.

The CBOE Volatility Index (VIX) climbed 3.7% this week to 10.97.

Computerized Investing Market Dashboard Indicators

This week, two of the Market Dashboard indicators triggered new bearish signals, one switching from bullish while the other switched from neutral. However, none of the Dashboard indicators triggered bullish or bearish confirming signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) gained 0.2% this week to close at $115.32, a mere 0.04% below its all-time high close on January 25. For the thirteenth week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $109.91, up from last week’s reading of $109.57. The spread between the IYY closing price and the moving average now stands at +4.92, down from +5.05% a week ago. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week with clear separation with this signal line to the downside. This week, the MACD of IYY moved below its signal line and remained below it at week’s end. This bearish crossover triggered a new bearish signal for this indicator. When the market is moving in a sideways manner as it has since the start of the year, it is not uncommon to see such “whipsaws" in trend-following indicators such as MACD. The MACD of IYY stands at +0.566 while the signal line is at +0.608. As long as the MACD ends the week with clear downside separation with the signal line, this indicator will remain bearish. If the MACD were to end the week above its signal line with meaningful separation, this would trigger a new bullish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 72.49, down from last week’s reading of 74.5. The signal for this indicator will remain bearish until July 28, 2017. If there is not another confirming bearish signal before then, the signal will go “stale” on that date and revert to neutral. A confirming bearish signal would occur if the indicator were to rise above the 75% level and fall back below it. This would push the “stale date” six months from the date of the confirming bearish signal. Alternatively, if the indicator reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 70.92, down from last week’s reading of 72.04. This indicator will remain bearish until July 14, 2017, on which date the signal with go “stale” and revert to neutral. However, if there is a bearish confirming signal before then, whereby the reading rises above the 70% bearish threshold and then starts to fall, the “stale date” will be pushed forward six months. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing bearish signals this week. Therefore, this composite indicator has triggered a new bearish signal this week. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI created clear separation with its moving average to the downside, thereby triggering a new bearish signal for this component indicator. $NASI ended the week at +199.52 versus the moving average at +210.95. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line ended the week below the signal line, which is bearish for this component indicator. The MACD of $NASI is -25.094 while the signal line is -9.787. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bearish as long as the two component indicators are both flashing bearish signals. This composite indicator would trigger a new bullish signal if the two component indicators are both flashing bullish signals. The indicator would trigger a new neutral signal if the two component indicators are not in agreement.
  • The AAII Investor Bullish Sentiment climbed 1.2 percentage points this week to 32.8%, breaking a three-week losing streak. This indicator will remain bullish until May 17, 2017. If there is not another confirming bullish signal before then, the current bullish signal will go “stale” and revert to neutral. A confirming bullish signal would occur if the reading falls below 25% and then climbs above it. If there is a confirming bullish signal before May 17, 2017, the “stale date” would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended February 3, 2017, two CI Market Dashboard indicators are bullish, three are neutral and four are bearish.

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1/27/2017

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) ended its flirtation with the 20,000 mark this week, topping the level for the first time. Although the blue-chip index fell on Friday, the Dow closed the week above 20,000 for the first time, adding 1.3% to 20,093.78. It is perhaps too early to tell whether the 20,000 will offer psychological support moving forward. Below that, the 19,700 level may offer support, followed by the 50-day moving average, which is currently at 19,628.21.

The S&P 500 Index (SPX) climbed 1% this week to close at 2,294.69. The index broke out of its weeks-long trading range we discussed a week ago and in the process moved above the resistance that had developed around the 2,280 level. We will have to wait to see if the 2,280 level turns into support moving forward. For now, we look to the 2,250 level for support as well as the 50-day moving average at 2,245.45.

This week it was an even split between winners and losers with the 10 S&P Sector SPDRs, with five each. Materials (XLB) posted the biggest gain at 3.4% after President Trump moved to cut regulation and promoted infrastructure projects such as the Keystone XL and Dakota Access pipelines. Real Estate (XLRE) lagged the other sector this week, shedding 0.9%. The Technology (XLK) sector was up 1.9% for the week

The broad market Wilshire 5000 (W5000) climbed 1.1% this week to 24,009.09, marking its highest weekly close ever. The index also broke out of a trading range this week that was bounded on the upper end around 23,800. We will wait to see if that turns into support moving forward. The 23,500 level may offer support moving forward, as well as the 50-day moving average at 23,488.51.

The tech-heavy Nasdaq Composite (COMP) rose 1.9% this week, closing Friday at a new all-time high of 5,660.78. After breaking through resistance around 5,575, we will wait to see if that turns into near-term support. Otherwise, round-number support at 5,500 and the 50-day moving average at 5,540.17 may offer downside support.

The Russell 2000 (RUT) index of smaller stocks gained 1.4% this week to close at 1,370.70. The index continues to trade in the 1,350 to 1,400 range. After testing the lower bound this week, as well as the 50-day moving average, the index bounced off strongly Tuesday. This is an encouraging sign that both the 1,350 level and the 50-day moving average (currently at 1,355.04) will offer downside support.

The CBOE Volatility Index (VIX) shed 8.3% this week to 10.58. During trading on Friday, the “fear gauge” hit a 30-month low of 10.3, according to Schaeffer’s Investment Research.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new bullish signal, switching from bearish, while another triggered a new neutral signal, switching from bearish. In addition, one of the Dashboard indicators triggered a confirming bearish signal.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) gained 1.1% this week for its first-ever weekly close above $115 at $115.10. For the twelfth week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $109.57, up from $109.23 a week ago. The spread between the IYY closing price and the moving average now stands at +5.05%, up from last week’s 4.27%. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • This week, the MACD of IYY moved above its signal line and remained above it at week’s end. This bullish crossover triggered a new bullish signal for this indicator. The MACD of IYY stands at +0.712 while the signal line is at +0.671. As long as the MACD ends the week with clear upside separation with the signal line, this indicator will remain bullish. If the MACD were to end the week below its signal line with meaningful separation, this would trigger a new bearish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 74.5, up slightly from 74.384 a week ago. This week, this indicator climbed above the 75% bearish threshold and then fell below it at week’s end, thereby triggering a confirming bearish signal. The confirming bearish signal this week pushed the signal’s “stale date” forward six months to July 28, 2017. This indicator will remain bearish for the next six months and will go “stale” on July 28, 2017, and revert to neutral. If the indicator triggers another confirming bearish signal before then by rising above the 75% level and falling back below it, the “stale date” will be again be pushed forward six months. Alternatively, if the reading falls below the 25% bullish threshold and rises above it, this would trigger a new bullish signal.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 72.04, up slightly from last week’s reading of 71.012. This is the highest week-ending reading for the indicator since July 11, 2014. This indicator will remain bearish until July 14, 2017, on which date the signal with go “stale” and revert to neutral. However, if there is a bearish confirming signal before then, whereby the reading rises above the 70% bearish threshold and then starts to fall, the “stale date” will be pushed forward six months. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 30% bullish threshold and then rebound.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing contradictory signals this week. Therefore, this composite indicator has triggered a new neutral signal this week. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI is basically even with its moving average, which is neutral for this component indicator. $NASI ended the week at +263.39 versus the moving average at +265.63. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line ended the week below the signal line, which is bearish for this component indicator. The MACD of $NASI is -6.528 while the signal line is +10.943. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain neutral as long as the two component indicators are not in agreement. This composite indicator would trigger a new bullish signal if the two component indicators are both flashing bullish signals. The indicator would trigger a new bearish signal if the two component indicators are both flashing bearish signals.
  • The AAII Investor Bullish Sentiment fell 5.4 percentage points this week to 31.6%. This is still the lowest bullish reading since November 3, 2016. This indicator will remain bullish until May 17, 2017. If there is not another confirming bullish signal before then, the current bullish signal will go “stale” and revert to neutral. A confirming bullish signal would occur if the reading falls below 25% and then climbs above it. If there is a confirming bullish signal before May 17, 2017, the “stale date” would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended January 27, 2017, three CI Market Dashboard indicators are bullish, four are neutral and two are bearish.

Start the Discussion!






1/20/2017

Author: Wayne A. Thorp, CFA

Weekly Market Summary

On Friday, Donald J. Trump was sworn in as the 45th President of the United States. Leading up to Inauguration Day, the “Trump Rally” had been losing its momentum, with the Dow Jones Industrial Average posting five straight losses before rising on Friday. In addition, Over the 10 trading days through Thursday, January 19, the S&P 500 had been down five of those days.

The Dow Jones Industrial Average (DJIA) slipped 0.3% this week to close at 19,885.73. The blue-chip index’s flirtation with the 20,000 mark continues, although it is starting to create some separation to the downside. The index has now traded within 1% of the 20,000 level for 27 days since first moving to within 1% of the millennium mark on December 12, 2016. According to Schaeffer’s Investment Research, this is the longest string of “failures” by the index to cross a millennium mark (10,000, 11,000, etc.) since it crossed the 10,000 level on March 16, 1999. As a result, we see the 20,000 as a major psychological barrier moving forward. To the downside, the 19,700 level may offer initial support, followed by the 19,500 level. The 50-day moving average is also currently at 19,497.63.

The S&P 500 Index (SPX) lost 0.2% this week to fall to 2,271.31. The large-cap index has been trading in a narrow range since early December and the upside barrier stands around the 2,280 level. To the downside, we look to the 2,250 level for initial support as well as the 50-day moving average at 2,232.73.

This week, seven of the 10 S&P Sector SPDRs posted gains. Consumer staples (XLP) were the biggest winners, adding 2.1%. Financials (XLF) and Health Care (XLV) both slumped 1.5% for the week. The Technology (XLK) sector was up 0.3% for the week

The broad market Wilshire 5000 (W5000) also dipped 0.3% this week to 23,743.68. The 23,750 mark failed to hold as near-term support, so we look to the 50-day moving average at 23,338.57 for initial support, followed by round-number support at the 23,000 level.

Not to be left out, the tech-laden Nasdaq Composite (COMP) also shed 0.3% to end the week at 5,555.33. At this point, the 5,575 level may offer resistance to the upside. We will wait to see if round-number support materializes at the 5,500 level.

The Russell 2000 (RUT) index of smaller stocks lagged its peers this week, sliding 1.5% to 1,351.85. The index continues to trade in the 1,350 to 1,400 range, although it is starting to test the lower bounds. To the downside, we look for initial support around 1,350, where previous resistance may become support. In addition, the 50-day moving average now stands at 1,343.32.

The CBOE Volatility Index (VIX) inched upward 2.8% to close the week at 11.54.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new bearish signal, switching from bullish. However, none of the indicators triggered confirming bullish or bearish signals.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) fell 0.2% this week to close at $113.89. However, for the eleventh week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $109.23. The spread between the IYY closing price and the moving average now stands at +4.27%. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week with clear separation with this signal line to the downside. Therefore, this indicator remains bearish for the fourth straight week. The MACD of IYY stands at +0.58 while the signal line is at +0.716. As long as the MACD ends the week with clear downside separation with the signal line, this indicator will remain bearish. If the MACD were to end the week above its signal line with meaningful separation, this would trigger a new bullish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 74.384, down from 80.548 a week ago. This week, the indicator fell below the 75% bearish threshold, thereby triggering a new bearish signal. This indicator will remain bearish for the next six months and will go “stale” on July 21, 2017, and revert to neutral. If the indicator triggers a confirming bearish signal before then by rising above the 75% level and falling back below it, the “stale date” will be pushed forward six months. Alternatively, if the reading falls below the 25% bullish threshold and rose above it, this would trigger a new bullish signal.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing bearish signals this week. Therefore, for the fourth consecutive week, this composite indicator is bearish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI remained below the signal line, which is bearish for this component indicator. $NASI ended the week at +269.54 versus the moving average at +302.24. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line ended the week below the signal line, which is bearish for this component indicator. The MACD of $NASI is +14.992 while the signal line is +38.282. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bearish as long as the two component indicators are both flashing bearish signals. This composite indicator would trigger a new bullish signal if the two component indicators are both flashing bullish signals. The indicator would trigger a new neutral signal if the two component indicators are not both bullish or bearish.
  • The AAII Investor Bullish Sentiment fell 6.6 percentage points this week to 37.0%. This is the largest one-week decline in 44 weeks and the lowest bullish reading since November 3, 2016. However, this indicator remains bullish. This indicator will remain bullish until May 17, 2017. If there is not another confirming bullish signal before then, the current bullish signal will go “stale” and revert to neutral. A confirming bullish signal would occur if the reading falls below 25% and then climbs above it. If there is a confirming bullish signal before May 17, 2017, the “stale date” would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended January 20, 2017, two CI Market Dashboard indicators are bullish, four are neutral and three are bearish.

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1/6/2017

Author: Wayne A. Thorp, CFA
We will be traveling next week so the next update for the CI Market Dashboard will not be posted until Sunday, January 15.

 

Weekly Market Summary

U.S. stocks rang in the new year in style this week, posting strong gains that pushed multiple indexes to new all-time highs.

The Dow Jones Industrial Average (DJIA) tacked on just over 1% this week to close at a 19,963.80. On Friday, the blue-chip index hit a new all-time intraday high of 19,999.63 but was not able to close above the highly anticipated 20,000 mark. As a result, we continue to see the 20,000 mark as upside resistance. The 19,500 mark may offer the first level of near-term support, followed by the 19,250 level.

The S&P 500 Index (SPX) closed at 2,276.98 on Friday after adding 1.7% for the week. The large-cap also hit a new intraday high on Friday but was unable to close at a new all-time high. The index did close above 2,275, which we had been viewing as a near-term resistance level. We will have to see if that turns into support moving forward. Below that, we look to the 2,200 to 2,215 level for support, as this range offered resistance previously. The 50-day moving average may also offer support around the 2,200 level.

This week, all 10 of the S&P Sector SPDRs posted gains. Health care (XLV) was the strongest sector, gaining 2.9% as congressional Republicans start debating the future of Obamacare. Utilities (XLU) were the weakest, adding 0.5% after several Federal Reserve officials spoke this week above future interest rate hikes. Technology (XLK) posted a 2.2% increase this week.

The broad market Wilshire 5000 (W5000) climbed 1.7% this week to 23,816.56, a new all-time high close. The index broke through resistance at the 23,750 level, so we will wait to see if this turns into near-term support. Below that is the 50-day moving average around the 23,000 level.

The tech-laden Nasdaq Composite (COMP) added 2.6% this week to close at 5,521.06. Earlier on Friday, the index notched a new intraday high. Now that the index has moved above the 5,400 level, which had been a tripping point, we wait to see if that turns into downside support. Also to the downside is the 50-day moving average around 5,340.

The Russell 2000 (RUT) index of smaller stocks lagged its peers this week, posting a 0.7% gain to close at 1,367.28. We continue to view the 1,400 as upside resistance. The index has been trading in the 1,350 to 1,400 range for a few weeks and any breakout above or below that range may mark the start of a broader move. To the downside, we look for initial support around 1,350, where previous resistance may become support. Below that is the 50-day moving average around 1,310.

The CBOE Volatility Index (VIX) fell 19.4% this week to 11.32.

Computerized Investing Market Dashboard Indicators

This week, none of the Market Dashboard indicators triggered new bearish or bullish signals. In addition, none of the indicators triggered confirming bullish or bearish signals.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) gained 1.9% this week to close at $114.06, a new all-time high close. In addition, for the ninth week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $108.71, up from $108.49 a week ago. The spread between the IYY closing price and the moving average now stands at +5.01% compared to +3.3% at the end of last week. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week with clear separation with this signal line to the downside. Therefore, this indicator remains bearish for the second straight week. The MACD of IYY stands at +0.854 while the signal line is at +0.955. As long as the MACD ends the week with clear downside separation with the signal line, this indicator will remain bearish. If the MACD were to end the week above its signal line with meaningful separation, this would trigger a new bullish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 81.42, up sharply from 68.29 a week ago. However, the indicator remains bullish. This week the reading moved above the 75% bearish threshold. If the reading does not fall back below 75% before May 12, 2017, the current bullish signal will go “stale” and revert to neutral. If the reading does fall below 75% before May 12, this would trigger a new bearish signal. Likewise, if in the same week the reading fell below the 25% bullish threshold and rose above it, this would trigger a confirming bullish signal. This, in turn, would push the “stale date” forward six months.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing bearish signals this week. Therefore, for the second consecutive week, this composite indicator is bearish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI remained below the signal line, which is bearish for this component indicator. $NASI ended the week at +361.57 versus the moving average at +365.31. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line ended the week below the signal line, which is bearish for this component indicator. The MACD of $NASI is +64.822 while the signal line is +88.107. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bearish as long as the two component indicators are both flashing bearish signals. This composite indicator would trigger a new bullish signal if the two component indicators are both flashing bullish signals. The indicator would trigger a new neutral signal if the two component indicators are not both bullish or bearish.
  • The AAII Investor Bullish Sentiment gained 0.6 percentage points this week to 46.2%, its highest reading in six weeks. In addition, this is the eighth week in a row where bullish sentiment has been above 40%. This continues to be the longest such streak since October-December 2014. This indicator will remain bullish until May 17, 2017. If there is not another confirming bullish signal before then, the current bullish signal will go “stale” and revert to neutral. A confirming bullish signal would occur if the reading falls below 25% and then climbs above it. If there is a confirming bullish signal before May 17, 2017, the “stale date” would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended January 6, 2017, three CI Market Dashboard indicators are bullish, four are neutral and two are bearish.

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12/30/2016

Author: Wayne A. Thorp, CFA
The AAII office will be closed on Monday, January 2, as will U.S. markets. From all of us at Computerized Investing and AAII, we wish you and your's a happy, safe and prosperous 2017.

Weekly Market Summary

U.S. stock markets ended 2016 on a bit of a losing streak, capping off what was otherwise an impressive year for stocks.

The Dow Jones Industrial Average (DJIA) lost 0.9% this week to close at 19,762.60, snapping its historic weekly win streak. The blue-chip index’s short-lived foray above 20,000 has us viewing that level as a psychological tripping point moving forward. The 19,500 mark may offer the first level of near-term support, followed by the 19,250 level. The Dow added 3.3% for December, 7.9% for the quarter and 13.4% for the year.

The S&P 500 Index (SPX) closed the week down 1.1% at 2,238.83. We still view the 2,275 level as short-term resistance. To the downside, we look to the 2,200 to 2,215 level for support, as this range offered resistance previously. The large-cap index settled the month, quarter, and year 1.8%, 3.3% and 9.6% higher, respectively.

This week, only one of the 10 S&P Sector SPDRs posted a gain: Real Estate (XLRE) was up 1.4%. Financials (XLF) shed 1.4% this week, followed closely by Consumer Discretionary (XLY) and Energy (XLE), which were both down 1.3%. Technology (XLK) was down 1.2% this week. For the quarter, Financials jumped 21.0%, while Real Estate slumped 4.4%. Technology added 1.7% for the quarter. For 2016, Energy surged 28.0%, followed by Financials and Industrials (XLI), which were up 22.8% and 20.0%, respectively. The Technology sector was up 15.0% for the year.

The broad market Wilshire 5000 (W5000) dipped 1.0% this week to 23,425.86. We view the 23,750 level as upside resistance while we look to the 22,800 to 23,100 range for initial downside support. For the month, the Wilshire rose 1.9%, while it added 3.8% and 10.7% for the quarter and year, respectively.

The tech-laden Nasdaq Composite (COMP) closed down 1.5% for the week at 5,383.12. The 5,450 level may offer some resistance moving forward. Round-number support did not materialize at the 5,400 level, so we look to the 50-day moving average to offer near-term support around the 5,320 level. The index added 1.1% for the month while gaining 1.3% and 7.5% for the quarter and year, respectively.

The Russell 2000 (RUT) index of smaller stocks fell 1.0% this week and closed at 1,357.13. To the upside, there may be resistance just below the 1,400 level. To the downside, we look for initial support around 1,350, where previous resistance may become support. For December, the Russell climbed 2.6%, while it added 8.4% for the quarter and 18.0% for 2016.

The CBOE Volatility Index (VIX) added 22.7% this week to 14.04. The “fear gauge” was up 5.3% this month and 5.6% for the quarter.

Computerized Investing Market Dashboard Indicators

This week, two of the Market Dashboard indicators triggered new bearish signals, both switching from bullish. However, none of the indicators triggered confirming bullish or bearish signals.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) lost 1.1% this week to close at $112.05. For the month, the ETF added 1.8%, while gaining 3.8% for the quarter and 12.0% for the year. However, for the eighth week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $108.49. The spread between the IYY closing price and the moving average now stands at +3.3%. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain BULLISH. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week with clear separation with this signal line to the downside. Last week the MACD crossed below the signal line. This bearish crossover triggered a new bearish signal for this indicator. The MACD of IYY stands at +0.855 while the signal line is at +1.132. As long as the MACD ends the week with clear downside separation with the signal line, this indicator will remain bearish. If the MACD were to end the week above its signal line with meaningful separation, this would trigger a new bullish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 68.29, down from 69.358 at the end of last week. This indicator will remain bullish until May 12, 2017. If a confirming bullish signal does not take place before then, this current bullish signal will go “stale” and revert to neutral on that date. A confirming bullish signal would occur if the indicator fell back below the25% bullish threshold and climbed back above it. If this were to happen before May 12, 2017, the “stale date” would be pushed back six months. Likewise, if the reading were to rise above 75% and then fall below it, this would trigger a new bearish signal.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing bearish signals this week. This marks a change in signal from bullish to bearish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI moved below the moving average and ended the week there. This bearish crossover triggered a new bearish signal for this component indicator. $NASI ended the week at +355.42 versus the moving average at +384.40. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD line moved below the signal line and remained there at week’s end. This bearish crossover triggered a new bearish signal for this component indicator. The MACD of $NASI is +92.46 while the signal line is +111.167. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bearish as long as the two component indicators are both flashing bearish signals. This composite indicator would trigger a new bullish signal if the two component indicators are both flashing bullish signals. The indicator would trigger a new neutral signal if the two component indicators are not both bullish or bearish.
  • The AAII Investor Bullish Sentiment gained 1.0 percentage points this week to 45.6%. This is the seventh week in a row where bullish sentiment has been above 40%. This continues to be the longest such streak since October-December 2014. This indicator will remain bullish until May 17, 2017. If there is not another confirming bullish signal before then, the current bullish signal will go “stale” and revert to neutral. A confirming bullish signal would occur if the reading falls below 25% and then climbs above it. If there is a confirming bullish signal before May 17, 2017, the “stale date” would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended December 30, 2016, three CI Market Dashboard indicators are bullish, four are neutral and two are bearish.

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12/16/2016

Author: Wayne A. Thorp, CFA
The CI Market Dashboard will be on break the weekend of December 24 as we celebrate the holidays with family and friends. We will return the weekend of December 31. From all of us at Computerized Investing and AAII, we wish you and yours a safe and festive holiday season.

Weekly Market Summary

After going a year since its last rate increase, the Federal Reserve announced this week that it was raising the benchmark federal funds rate by a quarter percentage point—to between 0.50% and 0.75%—and that officials now expect to raise short-term rates more often in 2017. This is only the second rate increase in more than 10 years. The decision to increase the federal funds rate was unanimous, and the Federal Open Market Committee (FOMC) now forecasts three rate hikes for 2017.

In the aftermath of the Fed’s rate increase announcement, the U.S. dollar rose to 14-year highs. The U.S. dollar has risen sharply since the U.S. presidential election, and this week’s Federal Reserve interest rate increase gave the dollar an additional boost. The impact of a stronger dollar includes the hampering of earnings of U.S. companies that sell goods overseas. The sales and earnings that these foreign sales generate must be translated back to U.S. dollars, and a strong dollar relative to foreign currencies lowers their value. However, a stronger dollar increases the purchasing power of U.S. consumers by making foreign travel and imported products cheaper.

The Dow Jones Industrial Average (DJIA) managed a 0.4% increase this week and closed at 19,843.41. The index posted a sixth straight weekly gain, its longest winning streak in more than a year according to Schaeffer’s Investment research. The 20,000 mark continues to be elusive and we view that level as upside resistance. The 19,500 mark may offer the first level of near-term support, followed by the 19,250 level, which was where the current breakout originated from.

The S&P 500 Index (SPX) lost 0.1% this week and ended the week at 2,258.07. The 2,275 level may be resistance to the upside. To the downside, we look to the 2,200 to 2,215 level for support, as this range offered resistance previously.

This week, seven of the 10 S&P Sector SPDRs posted losses. Breaking out of its recent slump, Health Care (XLV) turned in the best performance for the week, adding 1.1%. Utilities (XLU) gained 0.9% this week despite the announced interest rate hike. Perhaps the cold weather that is gripping most of the country warmed investors to the sector. Industrials (XLI) were the weakest sector this week, shedding 2.2%, followed closely by Materials (XLB), which fell 2.1%.

The broad market Wilshire 5000 (W5000) slid 0.3% this week to 23,600.09. We view the 23,750 level as upside resistance while we look to the 22,800 to 23,100 range for initial downside support.

The tech-laden Nasdaq Composite (COMP) also dipped 0.1% this week and closed at 5,437.16. The 5,450 level may offer some resistance moving forward. We will wait to see if round-number support at 5,400 materializes.

In a reversal from last week, the Russell 2000 (RUT) index underperformed most other market indexes this week, as small-cap issues fell 1.7% to close at 1,364.19. To the upside, there may be resistance just below the 1,400 level. To the downside, we look for initial support around 1,350, where previous resistance may become support.

The CBOE Volatility Index (VIX) rose 3.8% this week to 12.20.

Computerized Investing Market Dashboard Indicators

This week, none of the Market Dashboard indicators triggered a change in signal, nor did any of the indicators trigger confirming bullish or bearish signals.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) fell 0.15% this week to close at $113.64. However, for the sixth week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $108.56, up from $108.26 a week ago. The spread between the IYY closing price and the moving average now stands at +4.68%, down from last week’s reading of +5.13%. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week with clear separation with this signal line to the upside. Therefore, this indicator is bullish for the sixth straight week. The MACD of IYY stands at +1.418 while the signal line is at +1.314. As long as the MACD ends the week with clear upside separation with the signal line, this indicator will remain bullish. If the MACD were to end the week below its signal line with meaningful separation, this would trigger a new bearish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 67.94, down from 70.99 at the end of last week. This indicator will remain bullish until May 12, 2017. If a confirming bullish signal does not take place before then, this current bullish signal will go “stale” and revert to neutral on that date. A confirming bullish signal would occur if the indicator fell back below the25% bullish threshold and climbed back above it. If this were to happen before May 12, 2017, the “stale date” would be pushed back six months. Likewise, if the reading were to rise above 75% and then fall below it, this would trigger a new bearish signal.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing bullish signals this week. As a result, the composite indicator remains bullish for the fifth consecutive week. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI closed above the moving average, which is bullish for this component indicator. $NASI ended the week at +405.81 versus the moving average at +388.48. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD line once again closed above the signal line, which is bullish for this component indicator. The MACD of $NASI is +137.281 while the signal line is +114.102. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bullish as long as the two component indicators are both flashing bullish signals. This composite indicator would trigger a new bearish signal if the two component indicators are both flashing bearish signals. The indicator would trigger a new neutral signal if the two component indicators are not both bullish or bearish.
  • The AAII Investor Bullish Sentiment gained 1.5 percentage points this week to 44.7%. This is the fifth week in a row where bullish sentiment has been above 40%. This is the longest such streak since October-December 2014. This indicator will remain bullish until May 17, 2017. If there is not another confirming bullish signal before then, the current bullish signal will go “stale” and revert to neutral. A confirming bullish signal would occur if the reading falls below 25% and then climbs above it. If there is a confirming bullish signal before May 17, 2017, the “stale date” would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended December 16, 2016, five CI Market Dashboard indicators are bullish, four are neutral and none are bearish.

Start the Discussion!






12/9/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

This week marked the one-month anniversary since Hillary Clinton conceded the presidential election to Donald Trump. The so-called “Trump Rally” in U.S. stocks caught its second wind this week on the wings of strong consumer sentiment data and rising oil prices. On Wednesday, several of the major U.S. indexes posted their biggest one-day rallies since the election. On that day, the Dow Jones industrial average, S&P 500 index and NASDAQ Composite all gained more than 1%.

Then, on Thursday, something happened that has not occurred in 18 years: The Dow Jones industrial average, the S&P 500 index, the NASDAQ Composite Index, the Dow Jones transportation average and the Russell 2000 index all closed at new all-time highs. The last time this happened, according to MarketWatch, was March 16, 1998. The new high in the transportation index may portend strength in the overall economy because it includes train, truck and shipping companies that carry the raw materials and goods used in manufacturing and construction. In addition, Thursday marked the 13th record finish for the Dow industrials since the election.

The Dow Jones Industrial Average (DJIA) closed Friday with its fifth straight daily and weekly win. The blue-chip index also notched its 14th all-time-high-close since the close on election day. The index ended the week at 17,756.85 after rising 3.1%. On Wednesday the index broke out of its trading range on above-average volume, an encouraging technical signal. The 19,250 level may offer near-term support to the downside, as this was the level of the upside breakout.

The S&P 500 Index (SPX) ended the week with its sixth consecutive day of gains. According to Schaeffer’s Investment Research, this is the longest winning streak for the large-cap index since June 2014. For the week, the index gained 3.1% to 2,259.53. To the downside, we look to the 2,200 to 2,215 level for support, as this range offered resistance previously.

This week, all 10 of the S&P Sector SPDRs posted gains. Financials (XLF) were the biggest winners on anticipation of next week’s FOMC meeting, at which the Fed is expected to increase short-term interest rates. The sector gained 4.9% for the week. Technology (XLK) also rebounded strongly from last week, rising 4.2%. Health Care (XLV) brought up the rear, inching upward 0.6% after President-elect Trump declared he would take on high drug prices once he takes office.

The broad market Wilshire 5000 (W5000) posted a new all-time high close on Friday. For the week the Wilshire climbed 3.3% and closed at 23,678.76. The index muscled through resistance just above 23,000 and we will look to the 22,800 to 23,100 range for initial downside support.

The tech-laden Nasdaq Composite (COMP) also ended the week with its sixth winning session in a row. For the week, the Nasdaq climbed 3.6% to 5,444,50. The index pushed past resistance around 5,400 and we will wait to see if that turns into near-term support.

The Russell 2000 (RUT) index outperformed most other market indexes this week, as small-cap issues recovered from last week’s underperformance. This week the Russell 2000 added 5.6% to 1,388.07. This, too, is a new all-time-high close. To the downside, we look for initial support at the 1,310 to 1313,350 range.

The CBOE Volatility Index (VIX) fell 16.8% this week to 11.75. This is its lowest level since August 19.

Computerized Investing Market Dashboard Indicators

This week, none of the Market Dashboard indicators triggered a change in signal, nor did any of the indicators trigger confirming bullish or bearish signals.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) added 3.2% this week and closed at a new all-time high of $113.81. For the fifth week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $108.26. The spread between the IYY closing price and the moving average now stands at +5.13%, up sharply from +2.09% a week ago. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week with clear separation with this signal line to the upside. Therefore, this indicator is bullish for the fifth straight week. The MACD of IYY stands at +1.324 while the signal line is at +1.071. As long as the MACD ends the week with clear upside separation with the signal line, this indicator will remain bullish. If the MACD were to end the week below its signal line with meaningful separation, this would trigger a new bearish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 70.99, up from 56.21 at the close of last week. This is the highest reading since September 7. This indicator will remain bullish until May 12, 2017. If a confirming bullish signal does not take place before then, this current bullish signal will go “stale” and revert to neutral on that date. A confirming bullish signal would occur if the indicator fell back below the25% bullish threshold and climbed back above it. If this were to happen before May 12, 2017, the “stale date” would be pushed back six months. Likewise, if the reading were to rise above 75% and then fall below it, this would trigger a new bearish signal.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing bullish signals this week. As a result, the composite indicator remains bullish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI closed above the moving average, which is bullish for this component indicator. $NASI ended the week at +361.89 versus the moving average at +277.8. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD line once again closed above the signal line, which is bullish for this component indicator. The MACD of $NASI is +115.905 while the signal line is +71.708. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bullish as long as the two component indicators are both flashing bullish signals. This composite indicator would trigger a new bearish signal if the two component indicators are both flashing bearish signals. The indicator would trigger a new neutral signal if the two component indicators are not both bullish or bearish.
  • The AAII Investor Bullish Sentiment ticked downward 0.6 percentage points this week to 43.1%. This is the fourth week in a row where bullish sentiment has been above 49%. This is the longest such streak since December-January 2014-2015. This indicator will remain bullish until May 17, 2017. If there is not another confirming bullish signal before then, the current bullish signal will go “stale” and revert to neutral. A confirming bullish signal would occur if the reading fell below 25% and then climbed above it. If there is a confirming bullish signal before May 17, 2017, the “stale date” would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended December 9, 2016, five CI Market Dashboard indicators are bullish, four are neutral and none are bearish.

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12/2/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

U.S. stocks took a break this week from their “Trump rally.” Growing political uncertainty in Italy, as well as lukewarm domestic jobs data, had investors tapping the brake. The U.S. economy added enough jobs in November to raise expectations that the Federal Reserve will boost interest rates at its policy meeting later this month. The Dow Jones Industrial Average (DJIA) managed to notch its fourth consecutive weekly win, mainly on the backs of rebounding energy stocks. Oil prices rallied this week after the Organization of the Petroleum Exporting Countries (OPEC) announced its first production cut agreement in eight years. However, most broad market indexes ended the week in the red.

The Dow Jones Industrial Average (DJIA) eked out a weekly win by adding 0.1% to close at 19,170.42. After breaking out of its narrow trading range last week, the blue-chip index seems to have settled into another trading range, with the 19,200 level seemingly offering some near-term resistance. As we said a couple of weeks ago, trading ranges such as this are often a precursor to a major move. Either buying pressure is building and the index will break out to the upside or buying momentum has run out of steam and we will see prices retreat. Only time will tell. We look to the 19,000 level for key psychological support, followed by the 18,900 level, which served as a minor resistance point a couple of weeks ago. For November, the Dow climbed 5.4%.

The S&P 500 Index (SPX) ended the week down 1.0% at 2,191.95. The large-cap index was not able to hold the ground north of 2,200 and we will wait to see if that becomes a near-term resistance point. We look to the 2,180 level for initial support, as it was a former resistance level. Below that is the 2,165 level, which provided support a couple of weeks ago. For the month, the S&P 500 index added 3.4%.

Only four of the 10 S&P Sector SPDRs ended the week with gains. Energy (XLE) issues were the biggest winners on news of the OPEC production cut, as the sector climbed 2.9% this week. Technology (XLK) was the biggest loser, shedding 2.7% this week. For November, Financials (XLF) and Industrials (XLI) were the strongest sectors, adding 14.0% and 9.1%, respectively. Only three sectors were down in November, with Utilities (XLU) lagging them all with a 5.4% loss.

The broad market Wilshire 5000 (W5000) lost 1.0% this week and closed at 22,928.72. The index flirted with the 23,000 level for several days before moving below it. We will wait to see if that will be a short-term resistance point. To the downside, we look to the 22,700-22,800 level for initial support. This range has offered support and resistance over the last several weeks. For November, the Wilshire 5000 added 4.2%.

The tech-laden Nasdaq Composite (COMP) dropped 2.7% this week to 5,255.65. On Thursday the index closed below its 50-day moving average. However, this did not seem to trigger program selling, as the index managed a 0.09% gain on Friday. The index did fall through near-term support in the 5,320-5,340 range, which had been a resistance point in September and October. We now look for round-number support at the 5,200 level, followed by the 5,050 mark, which offered support previously. Below that is key psychological support level at 5,000. The tech index rose 2.6% in November.

The Russell 2000 (RUT) index of small stocks also underperformed this week on a relative basis, losing 2.4% to 1,314.25. The index did manage to break its four-day losing streak on Friday, clawing out a 0.03% gain. To the downside, we look for psychological support at 1,300. Below that is possible support at the 1,260 level, which had previously been a resistance point. The small-cap index rocketed to an 11.0% gain in November.

The CBOE Volatility Index (VIX) gained 14.4% this week to close at 14.12. The “fear gauge” tumbled 21.9% in November.

Computerized Investing Market Dashboard Indicators

This week, none of the Market Dashboard indicators triggered a new signal, nor did any of the indicators trigger confirming bullish or bearish signals.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) retreated 1.0% this week and closed at $111.34. For the fourth week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $108.02. The spread between the IYY closing price and the moving average now stands at +2.09%. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week with “clear” separation with this signal line to the upside, although the gap narrowed significantly. Therefore, this indicator is bullish for the fourth straight week. The MACD of IYY stands at +0.945 while the signal line is at +0.908. As long as the MACD ends the week with clear upside separation with the signal line, this indicator will remain bullish. If the MACD were to end the week below its signal line with meaningful separation, this would trigger a new bearish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 56.21, down from 63.53 at the close of last week. This indicator will remain bullish until May 12, 2017. If a confirming bullish signal does not take place before then, this current bullish signal will go “stale” and revert to neutral on that date. A confirming bullish signal would occur if the indicator fell back below the25% bullish threshold and climbed back above it. If this were to happen before May 12, 2017, the “stale date” would be pushed back six months. Likewise, if the reading were to rise above 75% and then fall below it, this would trigger a new bearish signal.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing bullish signals this week. As a result, the composite indicator remains bullish for the third consecutive week. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI closed above the moving average, which is bullish for this component indicator. $NASI ended the week at +156.44 versus the moving average at +131.34. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD line once again closed above the signal line, which is bullish for this component indicator. The MACD of $NASI is +73.247 while the signal line is +11.685. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bullish as long as the two component indicators are both flashing bullish signals. This composite indicator would trigger a new bearish signal if the two component indicators are both flashing bearish signals. The indicator would trigger a new neutral signal if the two component indicators are not both bullish or bearish.
  • The AAII Investor Bullish Sentiment slid 6.1 percentage points this week to 43.8%. Last week the reading was at 49.9%, this highest level since January 1, 2015. It was also just a hair below the bearish threshold of 50%. This indicator will remain bullish until May 17, 2017. If there is not another confirming bullish signal before then, the current bullish signal will go “stale” and revert to neutral. A confirming bullish signal would occur if the reading fell below 25% and then climbed above it. If there is a confirming bullish signal before May 17, 2017, the “stale date” would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended December 2, 2016, five CI Market Dashboard indicators are bullish, four are neutral and none are bearish.

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11/18/2016

Author: Wayne A. Thorp, CFA
The CI Market Dashboard will not be updated next week as we take a break for the Thanksgiving holiday. The next weekly update will take place the weekend of December 3rd. From everyone at AAII and CI, we wish you a happy and safe holiday.

Weekly Market Summary

This week saw U.S. stocks, for the most part, continue their upward march in the wake of Donald Trump’s presidential election victory. Major indexes hit record highs and the U.S. dollar, as measured by the U.S. Dollar Index (DXY), climbed to a 13-year high. It also seems a near certainty that the Federal Reserve will increase interest rates at the Federal Open Market Committee (FOMC) meeting next month, with several officials and chairwoman Janet Yellen making hawkish remarks this week.

The Dow Jones Industrial Average (DJIA) blue-chip index notched its second weekly win in a row, albeit by the slimmest of margins. The index clawed out a 0.1% gain for the week to close at 18,867.93. The index has been trading in a very narrow range for the last several sessions, which is often a precursor to a major move. Either buying pressure is building and the index will break out to the upside or buying momentum has run out of steam and we will see prices retreat. Only time will tell. We look to the 18,600 area for initial downside support, as this area served as resistance in July and August. Below that is the 50-day moving average currently at 18,280.70.

The S&P 500 Index (SPX) rose 0.8% this week to 2,181.90. The index moved above 2,175 this week, which we thought may offer some near-term resistance. However, the trading range has narrowed as the index seems to be taking a break to contemplate its next move. To the downside, the 50-day moving average (2,146.45) is a suspect support level. Below that is possible support around 2,175 followed by round-number support at 2,100.

Nine of the 11 S&P Sector SPDRs ended the week with gains. Health Care (XLV) was the weakest performer, surrendering 1.1%. Financial stocks continued their strong run on hopes of rising interest rates. The Financial (XLF) sector added 2.3% this week followed closely by Financial Services (XLFS), which gained 2.2%. Technology (XLK) ended the week with a 1.3% gain.

The broad market Wilshire 5000 (W5000) climbed 1.2% for the week and closed at 22,805.93. On Thursday the index closed at a new all-time high. To the downside, the 50-day moving average (22,321.75) may offer initial support. Below that is round-number support at 22,250 and 22,000.

The tech-laden Nasdaq Composite (COMP) jumped 1.6% this week to 5,321.51. In doing so it reclaimed the territory above its 50-day moving average. In addition, it posted a new record close on Thursday. We see the 50-day moving average as weak downside protection at best. More meaningful support appears to be just below the 5,050 mark, which offered support previously. Below that is key psychological support at 5,000.

The Russell 2000 (RUT) index of small stocks ended the week on an 11-day winning streak and posted a new all-time record close. This is the index’s longest consecutive streak of up days since 2003 and the fifth-longest since 1990, according to Schaeffer’s Investment Research. For the week, the index added 2.6% and closed at 1,315.64. We look to the 1,260 level, which had previously been a resistance point, as possible downside protection. Below that is the 50-day moving average at 1,231.30.

The CBOE Volatility Index (VIX) fell 9.3% this week to close at 12.85. This is the first time the “fear gauge” has closed below 13 since October 6.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new signal, as one switched to bullish from neutral. However, no indicators generated confirming bullish or bearish signals.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) added 1.1% this week and closed at $109.60. In doing so, it hit a new all-time week-ending close and is just 0.3% below the all-time high close it set on Thursday. For the second week in a row, the ETF closed above its 100-day moving average. Therefore, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $107.51, up from $107.13 at the end of last week. The spread between the IYY closing price and the moving average now stands at +1.94%, up from +1.23% a week ago. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain BULLISH. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week with clear separation with this signal line to the upside. Therefore, this indicator is bullish for the second straight week. The MACD of IYY stands at +0.676 while the signal line is at +0.248. As long as the MACD ends the week with clear upside separation with the signal line, this indicator will remain bullish. If the MACD were to end the week below its signal line with meaningful separation, this would trigger a new bearish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 54.21, up from 47.001 at the close of last week. This is the highest reading since September 30. This indicator will remain bullish until May 12, 2017. If a confirming bullish signal does not take place before then, this current bullish signal will go “stale” and revert to neutral. A confirming bullish signal would occur if the indicator fell back below the25% bullish threshold and climbed back above it. If this were to happen before May 12, 2017, the “stale date” would be pushed back six months. Likewise, if the reading were to rise above 75% and then fall below it, this would trigger a new bearish signal.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing bullish signals this week. As a result, the composite indicator has triggered a new bullish signal, switching from neutral. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. Once again this week, $NASI closed above the moving average, which is bullish for this component indicator. $NASI ended the week at -154.08 versus the moving average at -251.59. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD line crossed over the signal line and ended the week above it. This bullish crossover triggered a new bullish signal for this component indicator. The MACD of $NASI is -97.42 while the signal line is -147.423. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bullish as long as the two component indicators are both flashing bullish signals. This composite indicator would trigger a new bearish signal if the two component indicators are both flashing bearish signals. The indicator would trigger a new neutral signal if the two component indicators are not both bullish or bearish.
  • The AAII Investor Bullish Sentiment climbed 7.8 percentage points this week to 46.7%. Once again, this is the highest level of bullishness for 2016 and the highest since February 19, 2015. During the past two weeks, optimism has risen by a cumulative 23.0 percentage points—the 14th largest such move in the 29-year history of the AAII Investor Sentiment Survey. This indicator will remain bullish until May 17, 2017. If there is not another confirming bullish signal before then, the current bullish signal will go “stale” and revert to neutral. A confirming bullish signal would occur if the reading fell below 25% and then climbed above it. If there is a confirming bullish signal before May 17, 2017, the “stale date” would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended November 18, 2016, five CI Market Dashboard indicators are bullish, four are neutral and none are bearish.

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11/11/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

It was a roller coaster ride for the U.S. stock market this week as investors digested the notion of Donald Trump being elected the 45th President of the United States.

After notching its seventh straight losing session last Friday, the Dow Jones Industrial Average (DJIA) blue-chip index rallied and has now posted five consecutive winning sessions and recorded a record closing high on Friday at 18,847.66. For the week the index was up 5.4%. The index also broke out of the range in which it had been trading since early September and moved north of its 50-day moving average (18,234.5). We look to the 18,600 area for initial downside support, as this area had served as resistance in July and August. Below that is the 50-day moving average.

The S&P 500 Index (SPX) ended the week 3.8% higher at 2,164.45. This index also moved above its 50-day moving average this week. We wonder if there will be some upside resistance around the 2,175 level, as this had been a tripping point in mid- and late-September. To the downside, the 50-day moving average (2,145.88) isn’t an enthusiastic support level. Below that is round-number support at 2,100, followed by the 200-day moving average, which did offer support last week.

According to the Select Sector SPDRs website, eight of the 11 S&P Sector SPDRs ended the week with gains. Utilities (XLU) were the weakest performers, losing 4% as many analysts believe a Trump presidency will bring about expansionary policies that will boost interest rates and inflation. This same sentiment pushed financial serves (XLFS) and financials (XLF) up 11.28% and 11.19%, respectively, as financial firms tend to earn more in higher interest rate environments. Technology (XLK) added 1.19% for the week.

The broad market Wilshire 5000 (W5000) tacked on 4.35% for the week and closed at 22,533.48. The index reclaimed the ground above its 50-day moving average (22,307.61), although we are not sure how strong of a support level it will be. Below that is round-number support at 22,250 and 22,000. Then there is the 200-day moving average, currently at 21,612.85, which provided support last week.

The tech-laden Nasdaq Composite (COMP) marked its best week since July 2015, adding 3.8% to 5,237.11. It appears that the 50-day moving average may be a point of upside resistance. The index ran into it on multiple occasions this week, moving above it on an intraday basis on Thursday but failing to close above it. To the downside, meaningful support appears to be just below the 5,050 mark, which offered support last week. Below that is key psychological support at 5,000.

The Russell 2000 (RUT) index of small stocks rocketed 10.22% higher this week to close at 1,282.38, only 1.04% away from its all-time record high close set in June of last year. The index broke through resistance around 1,260, which had held the index back in September. We will have to wait to see if that area turns into downside support. Below that is the 50-day moving average at 1,225.62.

The CBOE Volatility Index (VIX) dropped over 37% this week to close at 14.17.

Computerized Investing Market Dashboard Indicators

This week, four of the Market Dashboard indicator triggered new signals: three switched to bullish from bearish and one switched to neutral from bearish. In addition, one indicator generated a confirming bullish signal.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) jumped 4.09% this week to close at 108.45. Following Tuesday’s surprise presidential election results, the index powered its way through the 100-day moving average and remained above it at week’s end. This bullish crossover triggered a new BULLISH signal for this indicator. The 100-day moving average of IYY's closing price ended the week at $107.13, up from $106.91 a week ago. The spread between the IYY closing price and the moving average now stands at +1.23, up from -2.54% at the end of last week. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain BULLISH. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week with clear separation with this signal line to the upside. This week, the MACD made a bullish crossover above the signal line and remained there at week’s end. Therefore, this indicator has triggered a new BULLISH signal. The MACD of IYY stands at +0.062 while the signal line is at -0.295. As long as the MACD ends the week with clear upside separation with the signal line, this indicator will remain BULLISH. If the MACD were to end the week below its signal line with meaningful separation, this would trigger a new bearish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 47.001, up from 23.404 the end of last week. This week, the indicator climbed above the 25% bullish threshold. As a result, this indicator triggered a new BULLISH signal. If a confirming bullish signal does not take place before May 12, 2017, this current bullish signal will go “stale” and revert to neutral. A confirming bullish signal would occur if the indicator fell back below the25% bullish threshold and climbed back above it. If this were to happen before May 12, 2017, the “stale date” would be pushed back six months. Likewise, if the reading was to rise above 75% and then fall below it, this would trigger a new bearish signal
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing contradictory signals this week. As a result, the composite indicator has triggered a new NEUTRAL signal. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI crossed above the moving average and remained there at the close of the week. This bullish crossover triggered a new BULLISH signal for this component indicator. $NASI ended the week at -421.55 versus the moving average at -451.02. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. Once again this week, the MACD line ended the week with meaningful separation below its signal line, which is a BEARISH signal for this component indicator. The MACD of $NASI is -190.555 while the signal line is -182.744. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain NEUTRAL as long as the two component indicators are not in agreement. This composite indicator would trigger a new bearish signal if the two component indicators are both flashing bearish signals. The indicator would trigger a new bullish signal if the two component indicators were both flashing bullish signals.
  • The AAII Investor Bullish Sentiment jumped 15.25 percentage points this week to 38.9%. This is the highest level of bullishness for 2016 and the highest since November 5, 2015. In addition, this was the biggest one-week increase since July 15, 2010. This week, the indicator climbed above the 25% bullish threshold. As a result, this indicator triggered a confirming BULLISH signal. If there is not another confirming bullish signal does not take place before May 12, 2017, the current bullish signal will go “stale” and revert to neutral. A conforming bullish signal would occur if the reading fell below 25% and then climbed above it. If there were to happen before May 12, 2017, the “stale date” would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended November 11, 2016, four CI Market Dashboard indicators are bullish, five are neutral and none are bearish.

Start the Discussion!






11/4/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) fell for the seventh straight session on Friday and ended the down 1.5% at 17,888.28. This is the longest losing streak for the blue-chip index since August. For October, the index lost 0.9%. This week, the index broke out of the trading range it had been in for the last couple of months to the downside. It also broke through round-number support at 18,000. It is now closing in on the 200-day moving average, which is currently at 17,767.88. First, though, we look for round-number support at 17,800. Then comes the 200-day moving average.

The S&P 500 Index (SPX) notched its ninth straight losing session to close the week, its longest such streak since December 1980. For the month of October, the index fell 1.9%. For the week, the large-cap index surrendered 1.9% and closed at 2,085.18. After breaking through round-number support at 2,100, the index may have found near-term support with the 200-day moving average (2,083.18).

According to the Select Sector SPDRs website, all 11 of the 11 S&P Sector SPDRs ended the week in the red. Materials (XLB) posted the smallest loss, down 0.71% while technology (XLK) fell 2.66% as the biggest weekly loser

The broad market Wilshire 5000 (W5000) slid 2.11% for the week and closed at 21,594.28. The index broke through round-number support at 22,000 and tested its 200-day moving average at 21,542.11. We look to the moving average for initial support, followed by round-number support at 21,500.

The tech-laden Nasdaq Composite (COMP) also posted its ninth consecutive loss, its longest losing streak since May 1984, according to Schaeffer’s Investment Research. The index gave up 2.3% in October. For the week, the index dropped 2.8% to 5,046.37. We look for support at the key psychological barrier of 5,000. Below that is the 200-day moving average, currently at 4,941.06.

The Russell 2000 (RUT) index of small stocks bucked the overall downward trend in the market on Friday, adding 0.57%. For the week, however, the index gave up 2.04% to close at 1,163.44. The index is nearing its 200-day moving average (1,150.39) and we look to it for initial downside support.

The CBOE Volatility Index (VIX) recorded its record ninth straight daily advance on Friday. The index added 28.4% in October. For the week, the “fear gauge” jumped 39%.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new signal, switching to neutral from bearish. In addition, no indicators generated confirming bullish or bearish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) surrendered 1.86% this week to close at $104.19, its lowest level since early July. Once again the ETF closed below its 100-day moving average, so this indicator remains BEARISH. The 100-day moving average of IYY's closing price ended the week at $106.91, up slightly from $106.84 a week ago. The spread between the IYY closing price and the moving average now stands at -2.54%, widening from last week’s reading of -0.64%. As long as the weekly closing price of IYY ends the week below its 100-day moving average in a “meaningful” way, this indicator will remain BEARISH. If IYY was to close the week with meaningful separation above its 100-day moving average, the indicator would trigger a new bullish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week with clear separation with this signal line to the downside. For the fourth week in a row, this indicator is BEARISH. The MACD of IYY stands at -0.747 while the signal line is at -0.471. As long as the MACD ends the week with clear downside separation with the signal line, this indicator will remain BEARISH. If the MACD were to end the week above its signal line with meaningful separation, this would trigger a new bullish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 23.4, down from 30.36 at the end of last week. This is the lowest week-ending reading for this indicator since January 22. This indicator remains BEARISH. This week, the indicator closed below the bullish threshold of 25%. If the reading were to rise above 25%, this would trigger a new bullish signal for this indicator. As long as the reading remains below 25%, this indicator is BEARISH. If a new bullish signal is not triggered before February 17, 2017, the current signal will go “stale” and revert to neutral. Likewise, if the reading were to rise above 75% and then fall below it in the same week prior to February 17, 2017, this would trigger a confirming bearish signal and the “stale date” would be pushed back six months.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 52.05, down from last week’s reading of 57.15, down from 61.63 a week ago. This is the lowest level for this indicator since March 2. Six months ago this indicator triggered a new bearish signal. Since then, however, there has not been a confirming bearish signal. As a result, the bearish signal has gone “stale” and the indicator has reverted to NEUTRAL. This indicator would trigger a new bearish signal if its reading rose above the 75% bearish threshold and then fell back below it. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 25% bullish threshold and then rises above it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are both flashing BEARISH signals this week. As a result, the composite indicator remains BEARISH for the fifth week in a row. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI once again closed below its moving average. Therefore, this component indicator remains BEARISH. $NASI ended the week at -488.4 versus the moving average at -368.11. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. Once again this week, the MACD line ended the week with meaningful separation below its signal line, which is a BEARISH signal for this component indicator. The MACD of $NASI is -188.734 while the signal line is -151.147.
  • The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain BEARISH as long as the two component indicators are both flashing bearish signals. The indicator would trigger a new bullish signal if the two component indicators were both flashing bullish signals. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator would trigger a new neutral indicator if the two component indicators are flashing conflicting signals.
  • The AAII Investor Bullish Sentiment fell 1.1 percentage points this week to 23.6%, its lowest level since June 23. However, the indicator remains BULLISH. For the third week in a row, the indicator is below the 25% bullish threshold. If the reading was to rise back above 25% before April 7, 2017, this would trigger a confirming bullish signal and the “stale date” for the signal would be pushed back six months from the date of the confirming bullish signal. If a confirming bullish signal does not occur before April 7, 2017, the current bullish signal would go stale and revert to neutral. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended November 4, 2016, one CI Market Dashboard indicator is bullish, four are neutral and four are bearish.

Start the Discussion!






11/4/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) fell for the seventh straight session on Friday and ended the week down 1.5% at 17,888.28. This is the longest losing streak for the blue-chip index since August. For October, the index lost 0.9%. This week, the index broke out of the trading range it had been in for the last couple of months to the downside. It also broke through round-number support at 18,000. It is now closing in on the 200-day moving average, which is currently at 17,767.88. First, though, we look for round-number support at 17,800. Then comes the 200-day moving average.

The S&P 500 Index (SPX) notched its ninth straight losing session to close the week, its longest such streak since December 1980. For the month of October, the index fell 1.9%. For the week, the large-cap index surrendered 1.9% and closed at 2,085.18. After breaking through round-number support at 2,100, the index may have found near-term support with the 200-day moving average (2,083.18).

According to the Select Sector SPDRs website, all 11 of the 11 S&P Sector SPDRs ended the week in the red. Materials (XLB) posted the smallest loss, down 0.71% while technology (XLK) fell 2.66% as the biggest weekly loser

The broad market Wilshire 5000 (W5000) slid 2.11% for the week and closed at 21,594.28. The index broke through round-number support at 22,000 and tested its 200-day moving average at 21,542.11. We look to the moving average for initial support, followed by round-number support at 21,500.

The tech-laden Nasdaq Composite (COMP) also posted its ninth consecutive loss, its longest losing streak since May 1984, according to Schaeffer’s Investment Research. The index gave up 2.3% in October. For the week, the index dropped 2.8% to 5,046.37. We look for support at the key psychological barrier of 5,000. Below that is the 200-day moving average, currently at 4,941.06.

The Russell 2000 (RUT) index of small stocks bucked the overall downward trend in the market on Friday, adding 0.57%. For the week, however, the index gave up 2.04% to close at 1,163.44. The index is nearing its 200-day moving average (1,150.39) and we look to it for initial downside support.

The CBOE Volatility Index (VIX) recorded its record ninth straight daily advance on Friday. The index added 28.4% in October. For the week, the “fear gauge” jumped 39%.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new signal, switching to neutral from bearish. In addition, no indicators generated confirming bullish or bearish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) surrendered 1.86% this week to close at $104.19, its lowest level since early July. Once again the ETF closed below its 100-day moving average, so this indicator remains BEARISH. The 100-day moving average of IYY's closing price ended the week at $106.91, up slightly from $106.84 a week ago. The spread between the IYY closing price and the moving average now stands at -2.54%, widening from last week’s reading of -0.64%. As long as the weekly closing price of IYY ends the week below its 100-day moving average in a “meaningful” way, this indicator will remain BEARISH. If IYY was to close the week with meaningful separation above its 100-day moving average, the indicator would trigger a new bullish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week with clear separation with this signal line to the downside. For the fourth week in a row, this indicator is BEARISH. The MACD of IYY stands at -0.747 while the signal line is at -0.471. As long as the MACD ends the week with clear downside separation with the signal line, this indicator will remain BEARISH. If the MACD were to end the week above its signal line with meaningful separation, this would trigger a new bullish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 23.4, down from 30.36 at the end of last week. This is the lowest week-ending reading for this indicator since January 22. This indicator remains BEARISH. This week, the indicator closed below the bullish threshold of 25%. If the reading were to rise above 25%, this would trigger a new bullish signal for this indicator. As long as the reading remains below 25%, this indicator is BEARISH. If a new bullish signal is not triggered before February 17, 2017, the current signal will go “stale” and revert to neutral. Likewise, if the reading were to rise above 75% and then fall below it in the same week prior to February 17, 2017, this would trigger a confirming bearish signal and the “stale date” would be pushed back six months.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 52.05, down from last week’s reading of 57.15, down from 61.63 a week ago. This is the lowest level for this indicator since March 2. Six months ago this indicator triggered a new bearish signal. Since then, however, there has not been a confirming bearish signal. As a result, the bearish signal has gone “stale” and the indicator has reverted to NEUTRAL. This indicator would trigger a new bearish signal if its reading rose above the 75% bearish threshold and then fell back below it. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 25% bullish threshold and then rises above it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are both flashing BEARISH signals this week. As a result, the composite indicator remains BEARISH for the fifth week in a row. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI once again closed below its moving average. Therefore, this component indicator remains BEARISH. $NASI ended the week at -488.4 versus the moving average at -368.11. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. Once again this week, the MACD line ended the week with meaningful separation below its signal line, which is a BEARISH signal for this component indicator. The MACD of $NASI is -188.734 while the signal line is -151.147.
  • The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain BEARISH as long as the two component indicators are both flashing bearish signals. The indicator would trigger a new bullish signal if the two component indicators were both flashing bullish signals. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator would trigger a new neutral indicator if the two component indicators are flashing conflicting signals.
  • The AAII Investor Bullish Sentiment fell 1.1 percentage points this week to 23.6%, its lowest level since June 23. However, the indicator remains BULLISH. For the third week in a row, the indicator is below the 25% bullish threshold. If the reading was to rise back above 25% before April 7, 2017, this would trigger a confirming bullish signal and the “stale date” for the signal would be pushed back six months from the date of the confirming bullish signal. If a confirming bullish signal does not occur before April 7, 2017, the current bullish signal would go stale and revert to neutral. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended November 4, 2016, one CI Market Dashboard indicator is bullish, four are neutral and four are bearish.

Start the Discussion!






11/4/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) fell for the seventh straight session on Friday and ended the week down 1.5% at 17,888.28. This is the longest losing streak for the blue-chip index since August. For October, the index lost 0.9%. This week, the index broke out of the trading range it had been in for the last couple of months to the downside. It also broke through round-number support at 18,000. It is now closing in on the 200-day moving average, which is currently at 17,767.88. First, though, we look for round-number support at 17,800. Then comes the 200-day moving average.

The S&P 500 Index (SPX) notched its ninth straight losing session to close the week, its longest such streak since December 1980. For the month of October, the index fell 1.9%. For the week, the large-cap index surrendered 1.9% and closed at 2,085.18. After breaking through round-number support at 2,100, the index may have found near-term support with the 200-day moving average (2,083.18).

According to the Select Sector SPDRs website, all 11 of the S&P Sector SPDRs ended the week in the red. Materials (XLB) posted the smallest loss, down 0.71% while technology (XLK) fell 2.66% as the biggest weekly loser

The broad market Wilshire 5000 (W5000) slid 2.11% for the week and closed at 21,594.28. The index broke through round-number support at 22,000 and tested its 200-day moving average at 21,542.11. We look to the moving average for initial support, followed by round-number support at 21,500.

The tech-laden Nasdaq Composite (COMP) also posted its ninth consecutive loss, its longest losing streak since May 1984, according to Schaeffer’s Investment Research. The index gave up 2.3% in October. For the week, the index dropped 2.8% to 5,046.37. We look for support at the key psychological barrier of 5,000. Below that is the 200-day moving average, currently at 4,941.06.

The Russell 2000 (RUT) index of small stocks bucked the overall downward trend in the market on Friday, adding 0.57%. For the week, however, the index gave up 2.04% to close at 1,163.44. The index is nearing its 200-day moving average (1,150.39) and we look to it for initial downside support.

The CBOE Volatility Index (VIX) recorded its record ninth straight daily advance on Friday. The index added 28.4% in October. For the week, the “fear gauge” jumped 39%.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new signal, switching to neutral from bearish. In addition, no indicators generated confirming bullish or bearish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) surrendered 1.86% this week to close at $104.19, its lowest level since early July. Once again the ETF closed below its 100-day moving average, so this indicator remains BEARISH. The 100-day moving average of IYY's closing price ended the week at $106.91, up slightly from $106.84 a week ago. The spread between the IYY closing price and the moving average now stands at -2.54%, widening from last week’s reading of -0.64%. As long as the weekly closing price of IYY ends the week below its 100-day moving average in a “meaningful” way, this indicator will remain BEARISH. If IYY was to close the week with meaningful separation above its 100-day moving average, the indicator would trigger a new bullish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week with clear separation with this signal line to the downside. For the fourth week in a row, this indicator is BEARISH. The MACD of IYY stands at -0.747 while the signal line is at -0.471. As long as the MACD ends the week with clear downside separation with the signal line, this indicator will remain BEARISH. If the MACD were to end the week above its signal line with meaningful separation, this would trigger a new bullish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 23.4, down from 30.36 at the end of last week. This is the lowest week-ending reading for this indicator since January 22. This indicator remains BEARISH. This week, the indicator closed below the bullish threshold of 25%. If the reading were to rise above 25%, this would trigger a new bullish signal for this indicator. As long as the reading remains below 25%, this indicator is BEARISH. If a new bullish signal is not triggered before February 17, 2017, the current signal will go “stale” and revert to neutral. Likewise, if the reading were to rise above 75% and then fall below it in the same week prior to February 17, 2017, this would trigger a confirming bearish signal and the “stale date” would be pushed back six months.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 52.05, down from last week’s reading of 57.15, down from 61.63 a week ago. This is the lowest level for this indicator since March 2. Six months ago this indicator triggered a new bearish signal. Since then, however, there has not been a confirming bearish signal. As a result, the bearish signal has gone “stale” and the indicator has reverted to NEUTRAL. This indicator would trigger a new bearish signal if its reading rose above the 75% bearish threshold and then fell back below it. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 25% bullish threshold and then rises above it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are both flashing BEARISH signals this week. As a result, the composite indicator remains BEARISH for the fifth week in a row. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI once again closed below its moving average. Therefore, this component indicator remains BEARISH. $NASI ended the week at -488.4 versus the moving average at -368.11. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. Once again this week, the MACD line ended the week with meaningful separation below its signal line, which is a BEARISH signal for this component indicator. The MACD of $NASI is -188.734 while the signal line is -151.147.
  • The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain BEARISH as long as the two component indicators are both flashing bearish signals. The indicator would trigger a new bullish signal if the two component indicators were both flashing bullish signals. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator would trigger a new neutral indicator if the two component indicators are flashing conflicting signals.
  • The AAII Investor Bullish Sentiment fell 1.1 percentage points this week to 23.6%, its lowest level since June 23. However, the indicator remains BULLISH. For the third week in a row, the indicator is below the 25% bullish threshold. If the reading was to rise back above 25% before April 7, 2017, this would trigger a confirming bullish signal and the “stale date” for the signal would be pushed back six months from the date of the confirming bullish signal. If a confirming bullish signal does not occur before April 7, 2017, the current bullish signal would go stale and revert to neutral. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended November 4, 2016, one CI Market Dashboard indicator is bullish, four are neutral and four are bearish.

Start the Discussion!






10/28/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) eked out a nearly 0.1% gain for the week and closed at 18,161.19. The index has been trading in a narrow range for the last couple of weeks, bounded to the upside by the 50-day moving average (18,272.32). To the downside, we still look for round-number support at 18,000.

The S&P 500 Index (SPX) surrendered 0.7% to end the week at 2,126.41. The index created some downside separation with its 50-day moving average, currently at 2,155.73, but we still believe that may pose some resistance to the upside moving forward. We continue to look to the 2,125 level for initial support, which held once again this week.

According to the Select Sector SPDRs website, five of the 11 S&P Select Sector SPDRs posted gains this week. The biggest loser for the week was real estate (XLRE), which dropped 3.4%. Utilities (XLU) and consumer staples (XLP) posted the biggest gains for the week, adding 0.96% and 0.84%, respectively.

The broad market Wilshire 5000 (W5000) dipped 0.92% for the week and closed at 22,059.65. The index moved away from the 50-day moving average, currently at 22,419.22, but we still feel it may offer some resistance to the upside moving forward. To the downside, we expect round-number support at the 22,000 level.

The tech-laden Nasdaq Composite (COMP) slid 1.3% over the last five trading sessions to close at 5,190.10. After ending last week above the 50-day moving average, the index moved through it decisively to the downside on Thursday and closed the week below it. While the index moved below round-number support at 5,200 on an intraday basis, the index did close above it at week’s end, so we continue to look to it for initial support.

The Russell 2000 (RUT) index of small stocks closed at 1,187.61 after diving 2.5% for the week. In doing so, the index took out support at the 1,220 and 1,200 levels. The index did seem to find some footing at its current level, which had served as near-term resistance in early June. We will have to wait and see whether that level will hold moving forward.

The CBOE Volatility Index (VIX) jumped 21.4% this week to close at 16.19, its highest weekly close since September 9.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new bearish signal, switching from bullish. However, no indicators generated confirming bullish or bearish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) slumped 0.8% this week to close at $106.16. This week we saw the ETF move below its 100-day moving average and remain there at week’s end. This bearish crossover triggered a new bearish signal for this indicator, switching from bullish. The 100-day moving average of IYY's closing price ended the week at $106.84, up from $106.74 a week ago. The spread between the IYY closing price and the moving average now stands at -0.64%, down from +0.25% at the end of last week. As long as the weekly closing price of IYY ends the week below its 100-day moving average in a “meaningful” way, this indicator will remain bearish. If IYY was to close the week with meaningful separation above its 100-day moving average, the indicator would trigger a new bullish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week with clear separation with this signal line to the downside. For the third week in a row, this indicator is bearish. The MACD of IYY stands at -0.301 while the signal line is at -0.241. As long as the MACD ends the week with clear downside separation with the signal line, this indicator will remain bearish. If the MACD were to end the week above its signal line with meaningful separation, this would trigger a new bullish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 30.36, down from 39.53 at the end of last week. This is the lowest week-ending reading for this indicator since February 12. This indicator will remain bearish until February 17, 2017. If there has not been another confirming bearish signal by then, the signal will go “stale” and revert to neutral. A confirming bearish signal would occur if the reading climbs above the bearish threshold of 75% and then falls back below it. If there is a confirming bearish signal before February 10, 2017, the stale date would move forward six months from that date. Alternatively, the indicator would trigger a new bullish signal if it was to fall below the 25% bullish threshold and then climbs above it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 57.15, down from 61.63 a week ago. This is the lowest level for this indicator since June 30. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above the 75% bearish threshold and then fell back below it—the signal will go “stale” and revert to neutral on November 4. If there is a confirming bullish signal before then, the stale date would be pushed back six months. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 25% bullish threshold and then rises above it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are both flashing bearish signals this week. As a result, the composite indicator remains bearish for the fourth week in a row. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI once again closed below its moving average. Therefore, this component indicator remains bearish. $NASI ended the week at -186.45 versus the moving average at -106.27. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. Once again this week, the MACD line ended the week with meaningful separation below its signal line, which is a bearish signal for this component indicator. The MACD of $NASI is -136.356 while the signal line is -112.216. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bearish as long as the two component indicators are both flashing bearish signals. The indicator would trigger a new bullish signal if the two component indicators were both flashing bullish signals. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator would trigger a new neutral indicator if the two component indicators are flashing conflicting signals.
  • The AAII Investor Bullish Sentiment gained 1.0 percentage points this week to 24.8%. The indicator remains bullish. For the second week in a row, the indicator’s is below the 25% bullish threshold. If the reading was to rise back above 25% before April 7, 2017, this would trigger a confirming bullish signal and the “stale date” for the signal would be pushed back six months from the point of the confirming bullish signal. If a confirming bullish signal does not occur before April 7, 2017, the current bullish signal would go stale and revert to neutral. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended October 28, 2016, one CI Market Dashboard indicator is bullish, three are neutral and five are bearish.

Start the Discussion!






10/21/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) gained 0.04% from last week to close at 18,145.71. For yet another week, the 50-day moving average (18,313.50) appears to be a resistance point to the upside. To the downside, we look for round-number support at 18,000.

The S&P 500 Index (SPX) posted a weekly win of 0.8% to 2,141.16. To the upside, the 50-day moving average (2,160.30) may be a speedbump. We continue to look to the 2,125 level for initial support.

According to the Select Sector SPDRs website, nine of the 11 S&P Select Sector SPDRs posted gains this week. The only two declining sectors were consumer staples (XLP), which fell 0.27% and industrials (XLI), which posted a 0.42% loss for the week. The biggest gainer for the week was materials (XLB), which added 1.6%. Technology (XLK) gained 0.34% over the last five trading days.

The broad market Wilshire 5000 (W5000) climbed 0.43% for the week to end at 22,264.26. The 50-day moving average, currently at 22,464.70, may offer some resistance to the upside moving forward. To the downside, we expect round-number support at the 22,000 level.

The tech-laden Nasdaq Composite (COMP) gained 0.8% this week to close at 5,257.40. After drifting above and below its 50-day moving average all week, the index managed to regain the high ground on Friday, closing above the average’s currently level of 5,250.51. We do not expect the moving average to offer any support moving forward, so we look to the 5,200 level for initial support.

The Russell 2000 (RUT) index of small stocks ended the week at 1,218.10 after climbing 0.47% for the week. It appears that the 1,220 level, which had previously offered support, may be a near-term resistance point. We look for initial support around the 1,200 mark, which held in mid-September.

The CBOE Volatility Index (VIX) posted a weekly loss of 17.2% to fall to 13.34.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new bullish signal, switching from neutral. However, no indicators generated confirming bullish or bearish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) gained 0.45% this week to close at $107.02. This week’s gain pushed the ETF above tits 100-day moving average, where it stayed at week’s end. Therefore, this bullish crossover triggered a new bullish signal, switching from neutral. The 100-day moving average of IYY's closing price ended the week at $106.74, up from $106.58 at the end of last week. The spread between the IYY closing price and the moving average widened to +0.25% from -0.04% at the end of last week. As long as the weekly closing price of IYY ends the week above its 100-day moving average in a “meaningful” way, this indicator will remain bullish. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator would trigger a new neutral signal.
  • The MACD of IYY ended the week with clear separation with this signal line to the downside. For the second week in a row, this indicator is bearish. The MACD of IYY stands at -0.264 while the signal line is at -0.227. As long as the MACD ends the week with clear downside separation with the signal line, this indicator will remain bearish. If the MACD were to end the week above its signal line with meaningful separation, this would trigger a new bullish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 39.53, up from 31.91 a week ago. This indicator will remain bearish until February 17, 2017. If there has not been another confirming bearish signal by then, the signal will go “stale” and revert to neutral. A confirming bearish signal would occur if the reading climbs above the bearish threshold of 75% and then falls back below it. If there is a confirming bearish signal before February 10, 2017, the stale date would move forward six months from that date. Alternatively, the indicator would trigger a new bullish signal if it was to fall below the 25% bullish threshold and then climbs above it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 61.63, down slightly from 62.698 at the end of last week. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above the 75% bearish threshold and then fell back below it—the signal will go “stale” and revert to neutral on November 4. If there is a confirming bullish signal before then, the stale date would be pushed back six months. Alternatively, the indicator would trigger a new bullish signal if the reading was to fall below the 25% bullish threshold and then rises above it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are both flashing bearish signals this week. As a result, the composite indicator remains bearish for the third week in a row. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI once again closed below its moving average. Therefore, this component indicator remains bearish. $NASI ended the week at -14.87 versus the moving average at +34.71. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. Once again this week, the MACD line ended the week with meaningful separation below its signal line, which is a bearish signal for this component indicator. The MACD of $NASI is -110.667 while the signal line is -82.882. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bearish as long as the two component indicators are both flashing bearish signals. The indicator would trigger a new bullish signal if the two component indicators were both flashing bullish signals. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator would trigger a new neutral indicator if the two component indicators are flashing conflicting signals.
  • The AAII Investor Bullish Sentiment fell 1.7 percentage points this week to 23.7%. However, this indicator remains bullish. This week, the indicator’s reading fell below the 25% bullish threshold. If the reading was to rise back above 25% before April 7, 2017, this would trigger a confirming bullish signal and the “stale date” for the current bullish signal would be pushed back six months from the point of the confirming bullish signal. If a confirming bullish signal does not occur before April 7, 2017, the current bullish signal would go stale and revert to neutral. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended October 21, 2016, two CI Market Dashboard indicator are bullish, three are neutral and four are bearish.

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10/14/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) lost 0.6% for the week, posting its second consecutive weekly loss to close at 18,138.38. For yet another week, the 50-day moving average (18,352.62) appears to be a resistance point to the upside. To the downside, we look for round-number support at 18,000.

The S&P 500 Index (SPX) slid 1% this week to 2,132.98. This week, the index created some downside separation with its 50-day moving average, which is at 2,164.57. The index neared support around 2,125 but it held for the time being.

According to the Select Sector SPDRs website, only three of the 11 S&P Select Sector SPDRs posted gains this week. Real estate (XLRE) and utilities (XLU), which had suffered in recent weeks on prospects of rising interest rates, posted gains of 1.22% and 1.34%, respectively. Healthcare (XLV) dropped 3.13%. Technology (XLK) slipped 0.52% for the week.

The broad market Wilshire 5000 (W5000) lost 1.02% to end the week at 21,168.82. This index also opened some distance to the downside between it and its 50-day moving average (22,503.99). As the index nears 22,000, we look to that level to offer round-number support.

The tech-laden Nasdaq Composite (COMP) ended the week at 5,214.16 after dropping 1.5%. This week the index succumbed to selling pressure and moved below its 50-day moving average (5,248.58). The index tested the 5,200 level this week and we look to it to offer downside support.

The Russell 2000 (RUT) index of small stocks dropped 1.95% this week to 1,212.41. In doing so, it lost the ground above its 50-day moving average, which is at 1,237.73. We now look for support around the 1,100 mark, which held in mid-September.

The CBOE Volatility Index (VIX) soared 19.6% this week at 16.12.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new neutral signal, switching from bullish, while another triggered a new bearish signal, moving from neutral. However, no indicators generated confirming bullish or bearish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) fell 1.01% this week to close at $106.54. This week’s decline in the ETF, combined with its rising 100-day moving average, put the two on near-equal footing. As a result, this indicator triggered a new neutral signal, switching from bullish. The 100-day moving average of IYY's closing price ended the week at $106.58, up from $106.31 a week ago. The spread between the IYY closing price and the moving average closed to -0.04% from 1.25% at the end of last week. As long as the weekly closing price of IYY and its 100-day moving average are basically the same, the indicator will remain neutral. If IYY ends the week with meaningful separation above its 100-day simple moving average, the indicator would trigger a new bullish signal. If IYY was to close the week with meaningful separation below its 100-day moving average, the indicator would trigger a new bearish signal.
  • The MACD of IYY ended the week with clear separation with this signal line to the downside. As a result, this indicator triggered a new bearish signal. The MACD of IYY stands at -0.260 while the signal line is at -0.099. As long as the MACD ends the week with clear downside separation with the signal line, this indicator will remain bearish. If the MACD were to end the week above its signal line with meaningful separation, this would trigger a new bullish signal. If the MACD ends the week with no “meaningful” separation with its signal line, this indicator would trigger a new neutral signal.
  • The percentage of NYSE Stocks Above 50-day Moving Average ended the week at 31.91, down from last week’s level of 44.41. This is the lowest week-ending value since February 12. This indicator will remain bearish until February 17, 2017. If there has not been another confirming bearish signal by then, the signal will go “stale” and revert to neutral. A confirming bearish signal would occur if the reading climbs above the bearish threshold of 75% and then falls back below it. If there is a confirming bearish signal before February 10, 2017, the stale date would move forward six months from that date. The indicator would trigger a new bullish signal if it were to fall below the 25% bullish threshold and then climbs above it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 62.698, down from 64.5 a week ago. In the process, the chart shifted to a new bearish column of O’s. This is also the lowest reading since July 11. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above the 75% bearish threshold and then fell back below it—the signal will go “stale” and revert to neutral on November 4. If there is a confirming bullish signal before then, the stale date would be pushed back six months. Alternatively, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are both flashing BEARISH signals this week. As a result, the composite indicator remains bearish for a second straight week. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI once again closed below its moving average. Therefore, this component indicator remains bearish. $NASI ended the week at +122.26 versus the moving average at +203.55. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. Once again this week, the MACD line ended the week with meaningful separation below its signal line, which is a bearish signal for this component indicator. The MACD of $NASI is -68.123 while the signal line is -48.004. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bearish as long as the two component indicators are both flashing bearish signals. The indicator would trigger a new bullish signal if the two component indicators were both flashing bullish signals. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator would trigger a new neutral indicator is the two component indicators are flashing conflicting signals.
  • The AAII Investor Bullish Sentiment fell 3.3 percentage points this week to 25.5%. This indicator will remain bullish until April 7, 2017. If there has not been another confirming bullish signal before then, the signal will go stale on that date and revert to neutral. If bullish sentiment were to fall below 25% and then move back above it before April 7, 2017, this would trigger a confirming bullish signal and the stale date would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended October 14, 2016, one CI Market Dashboard indicator is bullish, four are neutral and four are bearish.

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10/7/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) lost 0.4% for the week and closed at 18,240.49. For yet another week, the 50-day moving average (18,372.98) appears to be a resistance point to the upside. To the downside, we look for round-number support at 18,000.

The S&P 500 Index (SPX) lost 0.7% this week to close at 2,153.74. The index continues to toy with its 50-day moving average, but once again closed the week below its 2,167.06 level. We continue to look for support around the 2,125 level.

According to the Select Sector SPDRs website, only two of the 11 S&P Select Sector SPDRs posted gains this week. Financial firms benefited from market perceptions that the latest jobs data would be strong enough to spur the Fed to raise interest rates before the end of the year. The financials sector (XLF) outpaced all others with a 1.66% gain while financial services (XLFS) was a close second after adding 1.64%. Energy (XLE) was flat for the week. Technology (XLK) slipped 0.33% for the week.

The broad market Wilshire 5000 (W5000) retreated 0.79% to end the week at 22,397.43. The index continues to hug its 50-day moving average but closed below its 22,522.13 level on Friday. We look to the 22,000 level to offer round-number support to the downside

The tech-laden Nasdaq Composite (COMP) ended the week at 5,292.41 after giving back 0.4%. The index spent time on both sides of the 5,300 mark this week before closing the week below it. So, to the downside, we look to the 50-day moving average at 5,239.94 for initial support and then round-number support at 5,200.

The Russell 2000 (RUT) index of small stocks dropped 1.21% this week to 1,236.56, falling below the 1,2540 level that had been offering support in recent days. However, the 50-day moving average (1,236.41) continued to hold as support. Below that is round-number support at 1,200.

The CBOE Volatility Index (VIX) edged upward by 1.4% this week to 13.48.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new neutral signal, switching from bullish, while another triggered a new bearish signal, switching from neutral. In addition, one indicator generated a confirming bullish signal this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) lost 0.83% this week to close at $107.63. However, the ETF once again ended the week above its 100-day moving average, so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $106.31, up from last week’s reading of $106.00. The spread between the IYY closing price and the moving average narrowed to 1.25% from 2.39% at the end of last week. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. If IYY was to close the week below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average were basically the same, the indicator would revert to neutral.
  • The MACD of IYY ended the week basically even with its signal line. As a result, this indicator triggered a new neutral signal. The MACD of IYY stands at +0.0100 while the signal line is at +0.009. As long as the MACD ends the week with no “meaningful” separation with its signal line, this indicator will remain NEUTRAL. If the MACD were to end the week above its signal line with meaningful separation, this would trigger a new bullish signal. The indicator would trigger a new bearish signal if the MACD of IYY created meaningful separation below the signal line.
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 44.41, down from last week’s level of 57.6. This indicator will remain bearish until February 17, 2017. If there has not been another confirming bearish signal by then, the signal will go “stale” and revert to neutral. A confirming bearish signal would occur if the reading climbs above the bearish threshold of 75% and then falls back below it. If there is a confirming bearish signal before February 10, 2017, the stale date would move forward six months from that date. The indicator would trigger a new bullish signal if it were to fall below the 25% bullish threshold and then climbs above it in the same week.5
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 64.5, down from 67.33 a week ago. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above the 75% bearish threshold and then fell back below it—the signal will go “stale” and revert to neutral on November 4. If there is a confirming bullish signal before then, the stale date would be pushed back six months. Alternatively, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are both flashing bearish signals this week. As a result, the composite indicator has triggered a new bearish signal this week. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI once again closed below its moving average. Therefore, this component indicator remains bearish. $NASI ended the week at +309.67 versus the moving average at +340.71. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD line ended the week with meaningful separation below its signal line. This bearish crossover triggered a new bearish signal for this component indicator. The MACD of $NASI is -37.103 while the signal line is -33.636. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bearish as long as the two component indicators are both flashing bearish signals. The indicator would trigger a new bullish signal if the two component indicators were both flashing bullish signals. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator would trigger a new neutral indicator is the two component indicators are flashing conflicting signals.
  • The AAII Investor Bullish Sentiment climbed 4.8 percentage points this week to 28.8%. By climbing from 24.0% last week to close this week above the 25% bullish threshold, this indicator has triggered a confirming bullish signal. This indicator will remain bullish until April 7, 2017. If there has not been another confirming bullish signal before then, the signal will go stale on that date and revert to neutral. If bullish sentiment were to fall below 25% and then move back above it before April 7, 2017, this would trigger a confirming bullish signal and the stale date would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended October 7, 2016, two CI Market Dashboard indicators are bullish, four are neutral and three are bearish.

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9/30/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) climbed 0.3% this week to close at 18,308.15. For the month, the blue-chip index shed 0.5% but it ended the third quarter up 2.1%. Once again, the 50-day moving average (18,398.06) appears to be a resistance point. To the downside, we look for round-number support at 18,000.

The S&P 500 Index (SPX) ended the week with a 0.2% win and closed at 2,168.27. While the index slipped 0.1% in September, its ended the quarter with a 3.3% gain. The index continues to toy with its 50-day moving average but closed the week just below its 2,168.33 level. We continue to look for support just below the 2,125 level.

According to the Select Sector SPDRs website, five of the 11 S&P Select Sector SPDRs posted gains this week. Energy (XLE) jumped 4.39% as oil prices received a boost from rumors that OPEC would institute a production freeze at its next meeting. Utilities (XLU) were the biggest loser this week, dropping 3.83%. Technology (XLK) managed a 0.61% gain for the week. For the month, Financial Services (XLFS) posted the biggest gain at 5.71%, while Utilities fared the worst after sliding 5.61%. Financial Services also posted the strongest quarter by adding 9.61% and Utilities also posted the weakest quarter, losing 6.27%.

The broad market Wilshire 5000 (W5000) clawed its way to a 0.09% gain this week to close at 22,576.67. After trading on both sides of its 50-day moving average, the index closed above its 22,525.73 mark on Friday. However, we are not confident of the 50-day moving average providing near-term support. We look to the 22,000 level to offer round-number support to the downside

The tech-laden Nasdaq Composite (COMP) ended the week at 5,312.00 after climbing 0.1%. The index tacked on 1.9% in September and climbed 9.7% in the third quarter. The index has been flirting with the 5,300 level for several trading days and it is too soon to tell if it will provide short-term resistance or support. To the downside, there is also the 50-day moving average at 5,221.88 and round-number support at 5,200.

The Russell 2000 (RUT) index of small stocks slumped 0.24% this week to 1,251.65. The 1,240 level has developed into a support level over the last several trading days. Below that is the 50-day moving average at 1,233.59 and round-number support at 1,200.

The CBOE Volatility Index (VIX) gained 8.1% this week to 13.29. For the month, the VIX slipped 1% and retreated 15% for the quarter.

Computerized Investing Market Dashboard Indicators

This week, none of the Market Dashboard indicators triggered new signals, nor did any generate confirming bullish or bearish signals.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) ticked upward 0.16% this week to close at $108.53. The ETF once again ended the week above its 100-day moving average, so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $106.00, down from $106.16 a week ago. The spread between the IYY closing price and the moving average narrowed to 2.39% from 2.52% at the end of last week. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. If IYY was to close the week below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average were basically the same, the indicator would revert to neutral.
  • This week the MACD of IYY remained above its signal line. Therefore, this indicator remains bullish for the second straight week. The MACD of IYY stands at +0.059 while the signal line is at -0.036. As long as the MACD ends the week above its signal line with “meaningful” separation, this indicator will remain bullish. The indicator would trigger a new bearish signal if the MACD of IYY created meaningful separation below the signal line. The indicator would trigger a new neutral signal if the MACD line and its signal line ended the week basically even.
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 57.6, up from last week’s reading of 55.84. This indicator will remain bearish until February 17, 2017. If there has not been another confirming bearish signal by then, the signal will go “stale” and revert to neutral. A confirming bearish signal would occur if the reading climbs above the bearish threshold of 75% and then falls back below it. If there is a confirming bearish signal before February 10, 2017, the stale date would move forward six months from that date. The indicator would trigger a new bullish signal if it were to fall below the 25% bullish threshold and then climbs above it in the same week.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 67.33, up slightly from 67.1 a week ago. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above the 75% bearish threshold and then fell back below it—the signal will go “stale” and revert to neutral on November 4. If there is a confirming bullish signal before then, the stale date would be pushed back six months. Alternatively, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The AAII Investor Bullish Sentiment reading fell 0.8 percentage points this week to 24.0%. This is the lowest reading in 14 weeks. However, this indicator remains bullish. For the second week in a row, the indicator registered below the 25% bullish threshold. If bullish sentiment rises above 25%, this will trigger a confirming bullish signal. If this does not take place before December 30, 2016, the bullish signal would go “stale” and revert to neutral. If a confirming bullish signal is triggered before then, the stale date would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended September 30, 2016, three CI Market Dashboard indicators are bullish, four are neutral and two are bearish.

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9/23/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) added 0.8% for the week to close at 18,261.45. To the upside, it appears that the 50-day moving average, currently at 18,430.20, may be a bit of a stumbling block. To the downside, we look for round-number support at 18,000.

The S&P 500 Index (SPX) added 1.2% this week to close at 2,164.69. The index closed above the 50-day moving average on Thursday but fell to close below it on Friday. The 50-day moving average now stands at 2,169.01 and may offer some short-term resistance. We continue to look for support just below the 2,125 level.

According to the Select Sector SPDRs website, all but one of the 11 S&P Select Sector SPDRs posted a gain this week. The sole loser was financials (XLF), which dropped 18% on news that the Federal Reserve was holding rates steady as well as a special dividend to account for the separation of equity REITS and other real estate firms into their own headline sector. Real Estate (XLRE) benefitted from its new stand-alone status, climbing 4.42% this week to outpace all sectors. Technology (XLK) added 0.59% this week.

The broad market Wilshire 5000 (W5000) rose 1.4% this week to 22,557.11. The index reclaimed the 50-day moving average on Thursday and ended the week above it despite falling on Friday. We are not confident of the 50-day moving average providing near-term support, however. We look to the 22,000 level to offer round-number support to the downside

The tech-laden Nasdaq Composite (COMP) ended the week at 5,305.75 after posting a 1.2% gain. After closing Thursday at a new all-time high, the index fell on Friday but stayed above 5,300. It is too early to tell if round-number support develops at 5,300. Below that is round-number support at 5,200 and the 50-day moving average at 5,198.33

The Russell 2000 (RUT) index of small stocks jumped 2.4% this week to 1,254.62. This index also hit a new all-time high close on Thursday before retreating on Friday. To the downside, the 50-day moving average at 1,229.49 may offer the first line of support. Below that is round-number support at 1,200.

The CBOE Volatility Index (VIX) dropped 20% this week to 12.29.

Computerized Investing Market Dashboard Indicators

For the first time in five weeks, there are changes to the to the Market Dashboard. One Dashboard indicator triggered a new bullish signal (from bearish) while another triggered a new neutral signal (from bearish). However, there were no confirming bullish or bearish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) climbed 1.3% this week to close at $108.84. The ETF once again ended the week above its 100-day moving average, so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $106.16, up from $105.90 a week ago. The spread between the IYY closing price and the moving average widened to 2.52%, up from last week’s spread of 1.49%. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. If IYY was to close the week below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average were basically the same, the indicator would revert to neutral.
  • This week the MACD of IYY moved above its signal line and remained there at week's end. This bullish crossover triggered a new bullish signal for this indicator. The MACD of IYY stands at -0.049 while the signal line is at -0.120. As long as the MACD ends the week above its signal line with “meaningful” separation, this indicator will remain bullish. The indicator would trigger a new bearish signal if the MACD of IYY created meaningful separation below the signal line. The indicator would trigger a new neutral signal if the MACD line and its signal line ended the week basically even.
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 55.84, up from 33.42 a week ago. This indicator will remain bearish until February 17, 2017. If there has not been another confirming bearish signal by then, the signal will go “stale” and revert to neutral. A confirming bearish signal would occur if the reading climbs above the bearish threshold of 75% and then falls back below it. If there is a confirming bearish signal before February 10, 2017, the stale date would move forward six months from that date. The indicator would trigger a new bullish signal if it were to fall below the 25% bullish threshold and then climbs above it in the same week.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 67.1, up from 66.75 at the close of last week. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above the 75% bearish threshold and then fell back below it—the signal will go “stale” and revert to neutral on November 4. If there is a confirming bullish signal before then, the stale date would be pushed back six months. Alternatively, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing contradictory signals this week. Therefore, the composite indicator has triggered a new neutral signal. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI moved above the moving average and remained there at week’s end. This bullish crossover triggered a new bullish signal for this component indicator. $NASI ended the week at +413.16 versus the moving average at +394.77. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. Once again, the MACD line ended the week below the signal line, so this component indicator remains bearish. The MACD of $NASI is -36.886 while the signal line is -30.774. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain neutral as long as the two component indicators are flashing contradictory signals. The composite indicator will trigger a new bearish signal is the two component indicators are both flashing bearish signals. The indicator would trigger a new bullish signal if the two component indicators were both flashing bullish signals.
  • The AAII Investor Bullish Sentiment reading fell 3.1 percentage points this week to 24.8%. This is the lowest reading in 13 weeks. This indicator remains bullish. This week, the indicator fell below the 25% bullish threshold. If bullish sentiment rises above 25%, this will trigger a confirming bullish signal. If this does not take place before December 30, 2016, the bullish signal would go “stale” and revert to neutral. If a confirming bullish signal is triggered before then, the stale date would be pushed back six months. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended September 23, 2016, three CI Market Dashboard indicators are bullish, four are neutral and two are bearish.

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9/16/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) advanced 0.2% this week to close at 18,123.80. Round-number support at 18,000 held throughout the week, so we will continue to look to it for near-term downside support.

The S&P 500 Index (SPX) gained 0.5% this week to 2,139.16. Support just below 2,125 was tested multiple times this week, and it held. So we will look to the level as near-term support moving forward.

According to the Select Sector SPDRs website, five of the 11 S&P Select Sector SPDRs posted a gain this week. After being the industry leader last week, energy (XLE) was this week’s biggest loser, falling 3.23%. Technology (XLK) outpaced all other industries this week, posting a 2.27% gain

The broad market Wilshire 5000 (W5000) climbed 0.37% this week to close at 22,240.52. The index tested the 22,000 level multiple times this week, so we will look to round-number support at that level.

The tech-laden Nasdaq Composite (COMP) bucked the general trend this week, adding 2.3% to close at 5,244,57. The index continued to test its 50-day moving average week, but it managed to hold. So we look to it, currently at 5,170.15, for initial support

The Russell 2000 (RUT) index of small stocks gained 0.46% this week to close at 1,224.78. The index closed below the 50-day moving average earlier in the week but managed to claw its way back above it by the end of the week. To the downside is the 50-day moving average at 1,224.54.

The CBOE Volatility Index (VIX) lost 12.2% this week to 15.37

Computerized Investing Market Dashboard Indicators

For the fourth week in a row, there have been no changes in the Market Dashboard indicators; meaning none triggered new signals. Furthermore, there were no confirming bullish or bearish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) added 0.54% this week to close at $107.48. The ETF once again ended the week above its 100-day moving average, so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $105.90, up from last week’s $105.73. The spread between the IYY closing price and the moving average widened to 1.49%, up from 1.11% a week ago. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. If IYY was to close the week below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average were basically the same, the indicator would revert to neutral.
  • The MACD of IYY once again ended the week below its signal line. Therefore, this indicator remains bearish. The MACD of IYY stands at -0.275 while the signal line is at -0.011. As long as the MACD ends the week below its signal line with “meaningful” separation, this indicator will remain bearish. The indicator would trigger a new bullish signal if the MACD of IYY created meaningful separation above the signal line. The indicator would trigger a new neutral signal if the MACD line and its signal line ended the week basically even.
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 33.42, down from 44.5 a week ago. This is still the lowest reading since June 28. This indicator will remain bearish until February 17, 2017. If there has not been another confirming bearish signal by then, the signal will go “stale” and revert to neutral. A confirming bearish signal would occur if the reading climbed above the bearish threshold of 75% and then fell back below it. If there is a confirming bearish signal before February 10, 2017, the stale date would move forward six months from that date. The indicator would trigger a new bullish signal if it were to fall below the 25% bullish threshold and then climb above it in the same week.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 66.75, down from 70.01 at the end of last week. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above the 75% bearish threshold and then fell back below it—the signal will go “stale” and revert to neutral on November 4. If there is a confirming bullish signal before then, the stale date would be pushed back six months. Alternatively, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing bearish signals this week. Therefore, the composite indicator remains bearish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. Once again this week, $NASI closed below the moving average, which is a bearish signal for this component indicator. $NASI ended the week at +371.5 versus the moving average at +408.34. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. Once again, the MACD line ended the week below the signal line, so this component indicator remains bearish. The MACD of $NASI is -31.949 while the signal line is -14.138. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bearish as long as the two component indicators are both flashing bearish signals. The indicator would trigger a new bullish signal if the two component indicators were both flashing bullish signals. The indicator would trigger a new neutral signal if the two component indicators are flashing contradictory signals.
  • The AAII Investor Bullish Sentiment fell 1.8 percentage points this week to 27.9%. This is the lowest reading in 12 weeks. This indicator will remain bullish until December 30, 2016, unless bullish sentiment falls below 25% and then moves back above it, thereby triggering a confirming bullish signal. If this takes place, the “stale date” for the indicator would be pushed forward six months. If there is not a confirming bullish signal before then the indicator will go “stale” and revert to neutral on December 30. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended September 16, 2016, two CI Market Dashboard indicators are bullish, three are neutral and four are bearish.

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9/9/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) slid 2.2% this week to close at 18,085.45. Friday’s fall of 2.1% was its worst single-day decline since the June Brexit vote. This also marked the worst week for the index since early January. The blue-chip index fell through multiple key support levels this week. This includes the 50-day moving average and the 18,200 level, which had offered support in early August and was a previous resistance point. To the downside, we now look to round-number support at 18,000.

The S&P 500 Index (SPX) dipped 2.3% this week to 2,127.81. The large-cap index lost 2.5% on Friday, ending its string of consecutive days without a daily move of more than 1% dating back to July 8. This week was the worst for the index since February. The index broke through key support levels around 2,150 as well as its 50-day moving average. Just above the 2,100 level may be some support, as this area had served as resistance on multiple occasions prior to its breakthrough in July. Below that is round-number support at 2,100.

According to the Select Sector SPDRs website, only one of the 11 S&P Select Sector SPDRs posted a gain this week. The sole winner was energy (XLE), which posted a 0.9% gain on rising oil prices. Real estate (XLRE) took the biggest hit this week, falling 4.26%. Technology (XLK) was down 2.51% for the week.

The broad market Wilshire 5000 (W5000) fell 2.33% this week to close at 22,157.52. The index fell through key support at the 22,250 level as well as its 50-day moving average. To the downside, we now look to round-number support at 22,000.

The tech-laden Nasdaq Composite (COMP) shed 2.5% this week and closed at 5,127.12. The index fell through round-number support at 5,200 and closed the week just below its 50-day moving average at 5,134.73. We now look to the important psychological level of 5,000 for initial support.

The Russell 2000 (RUT) index of small stocks lost 2.6% this week to close at 1,219.21. Although the index fell through round-number support at 1,220, the 50-day moving average (1,217.22) held for the time being.

The CBOE Volatility Index (VIX) soared 46.1% this week to 17.5. This is the highest reading since late June and the biggest weekly gain since January.

Computerized Investing Market Dashboard Indicators

For the third week in a row, there have been no changes in the Market Dashboard indicators; meaning none triggered new signals. Furthermore, there were no confirming bullish or bearish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) fell 2.23% this week to close at $106.90. This is the lowest level since July 11. However, the ETF once again ended the week above its 100-day moving average, so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $105.73, up from $105.52 a week ago. The spread between the IYY closing price and the moving average closed to 1.11%, down from last week’s 3.62%. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. If IYY were to close the week below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average were basically the same, the indicator would revert to neutral.
  • The MACD of IYY once again ended the week below its signal line. Therefore, this indicator remains bearish. The MACD of IYY stands at +0.143 while the signal line is at +0.351. As long as the MACD ends the week below its signal line with “meaningful” separation, this indicator will remain bearish. The indicator would trigger a new bullish signal if the MACD of IYY created meaningful separation above the signal line. The indicator would trigger a new neutral signal if the MACD line and its signal line ended the week basically even.
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 44.5, down from last week’s reading of 67.59. This is the lowest reading since June 28. This indicator remains bearish. This indicator will remain bearish until February 17, 2017. If there has not been another confirming bearish signal by then, the signal will go “stale” and revert to neutral. A confirming bearish signal would occur if the reading climbed above the bearish threshold of 75% and then fell back below it. If there is a confirming bearish signal before February 10, 2017, the stale date would move forward six months from that date. The indicator would trigger a new bullish signal if it were to fall below the 25% bullish threshold and then climb above it in the same week.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 70.01, a tick downward from 70.53 a week ago. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above the 75% bearish threshold and then fell back below it—the signal will go “stale” and revert to neutral on November 4. If there is a confirming bullish signal before then, the stale date would be pushed back six months. Alternatively, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing bearish signals this week. Therefore, the composite indicator remains bearish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. Once again this week, $NASI closed below the moving average, which is a bearish signal for this component indicator. $NASI ended the week at +482.14 versus the moving average at +497.76. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. Once again, the MACD line ended the week below the signal line, so this component indicator remains bearish. The MACD of $NASI is -6.40 while the signal line is +3.814. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bearish as long as the two component indicators are both flashing bearish signals. The indicator would trigger a new bullish signal if the two component indicators were both flashing bullish signals. The indicator would trigger a new neutral signal if the two component indicators are flashing contradictory signals.
  • The AAII Investor Bullish Sentiment gained 1.1 percentage points this week to 29.7%. This indicator will remain bullish until December 30, 2016, unless bullish sentiment falls below 25% and then moves back above it, thereby triggering a confirming bullish signal. If this takes place, the “stale date” for the indicator would be pushed forward six months. If there is not a confirming bullish signal before then the indicator will go “stale” and revert to neutral on December 30. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended September 9, 2016, two CI Market Dashboard indicators are bullish, three are neutral and four are bearish.

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9/2/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) ended the week 0.5% higher to close at 18,491.96. This is the first weekly win in three weeks for the blue chip index. We still view the 18,600 level as a short-term stumbling block. To the downside, 50-day moving average at 18,333.99 may offer initial support. Below that is the 18,200 level, which was previously a resistance level.

The S&P 500 Index (SPX) closed the week with a 0.5% gain to 2,179.98. The historic calm for the large-cap index continues, as it has yet to make a daily move to the upside or downside of more than 1% since July 8. To the downside, the 2,160 level has been offering support for the last month and below that is the 50-day moving average at 2,153.09.

According to the Select Sector SPDRs website, all 11 of the 11 S&P Select Sector SPDRs posted gains this week. The biggest gain came from the Utilities sector (XLU), which received a boost following the weaker-than-expected August payroll data. This lowered expectations of a September rate increase from the Fed. Health Care (XLV) had the smallest gain of the week, adding 0.11%. Technology (XLK) was up 0.45% this week

The broad market Wilshire 5000 (W5000) climbed 0.66% this week to close at 22,686.70. The 50-day moving average at 22,321.84 is the initial support level to the downside, followed immediately by the 22,500 level.

The tech-laden Nasdaq Composite (COMP) added 0.6% this week and closed at 5,249.90. Once again the index flirted with the 5,250 mark but failed to achieve it. Every time the index tests this level, the more significant a resistance point it becomes. To the downside, we look for round-number support around the 5,200 level, followed by the 50-day moving average at 5,091.30.

This was once again a relatively good week for smaller stocks. The Russell 2000 (RUT) index of small stocks gained 1.1% this week to close at 1,251.83. The index managed to break through short-term resistance at 1,240. To the downside is the 50-day moving average at 1,206.50, followed by round-number support at 1,200.

The CBOE Volatility Index (VIX) dropped 12.2% this week to 11.98.

Computerized Investing Market Dashboard Indicators

For the second week in a row, there have been no changes in the Market Dashboard indicators; none triggered new signals. Furthermore, there were no confirming bullish or bearish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) added 0.71% this week to close at $109.34. The ETF once again ended the week above its 100-day moving average, so this indicator remains bullish.
  • The 100-day moving average of IYY's closing price ended the week at $105.52, up from $105.16 a week ago. The spread between the IYY closing price and the moving average is at 3.62%, up from last week’s 3.24%. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. If IYY were to close the week below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average were basically the same, the indicator would revert to neutral.
  • The MACD of IYY once again ended the week below its signal line. Therefore, this indicator remains bearish. The MACD of IYY stands at +0.327 while the signal line is at +0.453. As long as the MACD ends the week below its signal line with “meaningful” separation, this indicator will remain bearish. The indicator would trigger a new bullish signal if the MACD of IYY created meaningful separation above the signal line. The indicator would trigger a new neutral signal if the MACD line and its signal line ended the week basically even.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +341, up from +185 a week ago. However, this indicator remains neutral. This indicator will trigger a new bullish signal if the reading were to fall below the -750 level from positive territory and start to recover, or if the reading experienced a peak-to-trough decline of 750 points or more over a 10-trading-day period and then began to rebound. The indicator ended the week at its highest level in the last 10 trading days, so there is no peak-to-trough spread to report.
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 67.59, up from last week’s reading of 66.41. This indicator will remain bearish until February 17, 2017. If there has not been another confirming bearish signal by then, the signal will go “stale” and revert to neutral. A confirming bearish signal would occur if the reading climbed above the bearish threshold of 75% and then fell back below it. If there is a confirming bearish signal before February 10, 2017, the stale date would move forward six months from that date. The indicator would trigger a new bullish signal if it were to fall below the 25% bullish threshold and then climb above it in the same week.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 70.53, unchanged from last week. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above 75% and then fell back below it—the signal will go “stale” and revert to neutral on November 4. Alternatively, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing bearish signals this week. Therefore, the composite indicator remains bearish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI again closed below the moving average, which is a bearish signal for this component indicator. $NASI ended the week at +489.07 versus the moving average at +500.22. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. Once again, the MACD line ended the week below the signal line, so this component indicator remains bearish. The MACD of $NASI is -1.317 while the signal line is +16.142. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bearish as long as the two component indicators are both flashing bearish signals. The indicator would trigger a new bullish signal if the two component indicators were both flashing bullish signals. The indicator would trigger a new neutral signal if the two component indicators are flashing contradictory signals.
  • The AAII Investor Bullish Sentiment slipped 0.8 percentage points this week to 28.6%. This is the lowest weekly reading in 10 weeks. However, this indicator remains bullish. This indicator will remain bullish until December 30, 2016, unless bullish sentiment falls below 25% and then moves back above it, thereby triggering a confirming bullish signal. If this takes place, the “stale date” for the indicator would be pushed forward six months. If there is not a confirming bullish signal before then the indicator will go “stale” and revert to neutral on December 30. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended September 2, 2016, two CI Market Dashboard indicators are bullish, three are neutral and four are bearish.

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8/26/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) gave back 0.8% to close this week at 18,395.40. The 18,600 level still appears to be a resistance point to the upside. To the downside, the 18,200 level, which has previously served as resistance, may offer near-term support. Below that is the 50-day moving average at 18,270.64 and round-number support at 18,000.

The S&P 500 Index (SPX) lost 0.7% this week, falling to 2,169.04. Yet another week passed for the large-cap index without a daily move of more than 1%, a streak dating back to July 8. To the downside, the 2,160 level has been offering support for the last month. Below that is the 50-day moving average at 2,144.37.

According to the Select Sector SPDRs website, only three of the 11 S&P Select Sector SPDRs posted gains this week. The biggest loser for the week was Utilities (XLU), losing 2.23%, as comments from Fed chair Janet Yellen on Friday hinted that an interest rate increase may come as early as September. Financial Services (XLFS) and Financials (XLF) both benefitted from the prospects of higher interest rates, adding 0.65% and 0.42% for the week, respectively. Technology (XLK) also clawed out a slight gain for the week, ticking upward 0.06%.

The broad market Wilshire 5000 (W5000) slipped 0.56% this week to close at 22,538.14. We continue to view the 22,500 level as initial downside support. Below that is round-number support at 22,250 and the 50-day moving average at 22,220.65.

The tech-laden Nasdaq Composite (COMP) surrendered 0.8% this week to close at 5,218.92. The index closed above the 5,250 mark on Tuesday but was not able to hold onto levels above it. Therefore, we still view the 5,250 level as a short-term stumbling block. To the downside, we look for round-number support around the 5,200 level and below that is round-number support at 5,000.

This was once again a relatively good week for smaller stocks. The Russell 2000 (RUT) index of small stocks eked out a 0.1% gain this week to 1,238.03. The index closed at 1,240 on Thursday and we will see if that offers any resistance moving forward. We still look to the 1,200 level for initial downside support. Below that is the 50-day moving average at 1,188.73.

The CBOE Volatility Index (VIX) surged 20.4% this week to 13.65. This is its highest level since July 7.

Computerized Investing Market Dashboard Indicators

This week, none of the Market Dashboard indicators triggered new signals. Furthermore, there were no confirming bullish or bearish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) fell 0.66% this week to close at $108.57. However, the ETF once again ended the week above its 100-day moving average, so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $105.16, up from $104.81 a week ago. The spread between the IYY closing price and the moving average is at 3.24%, down from 4.27% last week. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. If IYY were to close the week below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average were basically the same, the indicator would revert to neutral.
  • The MACD of IYY once again ended the week below its signal line. The MACD of IYY stands at +0.463 while the signal line is at +0.646. As long as the MACD ends the week below its signal line with “meaningful” separation, this indicator will remain bearish. The indicator would trigger a new bullish signal if the MACD of IYY created meaningful separation above the signal line. The indicator would trigger a new neutral signal if the MACD line and its signal line ended the week basically even.
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 66.41, down from last week’s reading of 73.50. This indicator will remain bearish until February 17, 2017. If there has not been another confirming bearish signal by then, the signal will go “stale” and revert to neutral. A confirming bearish signal would occur if the reading climbed above the bearish threshold of 75% and then fell back below it. If there is a confirming bearish signal before February 10, 2017, the stale date would move forward six months from that date. The indicator would trigger a new bullish signal if it were to fall below the 25% bullish threshold and then climb above it in the same week.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 70.53, down slightly from 71.228 a week ago. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above 75% and then fell back below it—the signal will go “stale” and revert to neutral on November 4. Alternatively, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing bearish signals this week. Therefore, the composite indicator remains bearish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI again closed below the moving average, which is a bearish signal for this component indicator. $NASI ended the week at +519.26 versus the moving average at +538.37. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. Once again, the MACD line ended the week below the signal line, so this component indicator remains bearish. The MACD of $NASI is +19.418 while the signal line is +39.256. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bearish as long as the two component indicators are both flashing bearish signals. The indicator would trigger a new bullish signal if the two component indicators were both flashing bullish signals. The indicator would trigger a new neutral signal if the two component indicators are flashing contradictory signals.
  • The AAII Investor Bullish Sentiment fell 6.1 percentage points this week to 29.4%. This is the biggest weekly decline in bullish sentiment in 21 weeks and is the lowest bullish reading in eight weeks. However, this indicator will remain bullish until December 30 unless bullish sentiment falls below 25% and then moves back above it, thereby triggering a confirming bullish signal. If this takes place, the “stale date” for the indicator would be pushed forward six months. If there is not a confirming bullish signal before then the indicator will go “stale” and revert to neutral on December 30. Alternatively, a new bearish signal would be triggered if the reading rises above the 50% bearish threshold and then falls below it.

For the week ended August 26, 2016, two CI Market Dashboard indicators are bullish, three are neutral and four are bearish.

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8/19/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) ticked downward by 0.1% this week to 18,552.57. The 18,600 level still appears to be a resistance point to the upside. To the downside, the 18,200 level, which had previously served as resistance, may offer support. Below that is round-number support at 18,000 and the 50-day moving average at 18,195.52.

The S&P 500 Index (SPX) was once again basically flat this week, edging downward 0.008% to 2,183.87. The large-cap index continues to trade in a narrow range and it extended its streak of days with no upward or downward move of more than 1%, dating back to July 8. To the downside, the 2,160 level has been offering support for the last month. Below that is the 50-day moving average at 2,134.64.

According to the Select Sector SPDRs website, only five of the 11 S&P Select Sector SPDRs posted gains this week. The biggest loser for the week was Real Estate (XLRE), which fell 1.89. Oil prices continued to rise, propelling the energy sector (XLE) to another weekly win—adding 2.49%. Technology (XLK) was down 0.19% for the week.

The broad market Wilshire 5000 (W5000) added 0.026% this week to close at 22,665.28. We continue to view the 22,500 level as initial downside support. Below that is round-number support at 22,250 and the 50-day moving average at 22,110.50.

The tech-laden Nasdaq Composite (COMP) picked up 0.1% this week to close at 5,238.38. This marked the eight consecutive weekly gain for the index, its longest streak since April 2010, according to Schaeffer’s Investment Research. To the upside, the 5,250 level may be a short-term stumbling block. To the downside, we look for round-number support at the 5,200 level and below that is round-number support at 5,000.

This was a relatively good week for smaller stocks. The Russell 2000 (RUT) index of small stocks climbed 0.57% this week to 1,236.77. We look to the 1,200 level for initial support. Below that is the 50-day moving average at 1,188.73.

The CBOE Volatility Index (VIX) lost 1.8% this week to close at 11.34. This is well below the 50-day moving average of 14.74 and the 200-day moving average of 16.94.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new signal—bearish from neutral. In addition, one of the indicators triggered a confirming bearish signal.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) added 0.08% this week to close at $109.29. The ETF once again ended the week above its 100-day moving average, so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $104.81. The spread between the IYY closing price and the moving average is at 4.27%, down from 4.6% a week ago. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. If the IYY were to close the week below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average were basically the same, the indicator would revert to neutral.
  • The MACD of IYY once again ended the week below its signal line. Therefore, this indicator remains bearish. The MACD of IYY stands at +0.716 while the signal line is at +0.805. As long as the MACD ends the week below its signal line with “meaningful” separation, this indicator will remain bearish. The indicator would trigger a new bullish signal if the MACD of IYY created meaningful separation above the signal line. The indicator would trigger a new neutral signal if the MACD line and its signal line ended the week basically even.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +164, up from +154 a week ago. This indicator remains neutral. This indicator will trigger a new bullish signal if the reading were to fall below the -750 level from positive territory and start to recover, or if the reading experienced a peak-to-trough decline of 750 points or more over a 10-trading-day period and then began to rebound. The current 10-day peak-to-trough spread for this indicator is 192 (265 – 73).
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 73.50, down from last week’s reading of 74.672. On two separate occasions this past week, the indicator closed above the 75% bearish threshold and the indicator ended the week below it. Therefore, the indicator has once again triggered a confirming bearish signal. This indicator will remain bearish until February 17, 2017. If there has not been another confirming bearish signal by then, the signal will go “stale” and revert to neutral. A confirming bearish signal would occur if the reading climbed above the bearish threshold of 75% and then fell back below it. If there is a confirming bearish signal before February 10, 2017, the stale date would move forward six months from that date. The indicator would trigger a new bullish signal if it were to fall below the 25% bullish threshold and then climb above it in the same week.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 71.228, up from last week’s reading of 70.038. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above 75% and then fell back below it—the signal will go “stale” and revert to neutral on November 4. Alternatively, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing bearish signals this week. This is a change from last week, so the composite indicator has triggered a new bearish signal. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI created some separation below the moving average, thereby triggering a bearish signal for this component indicator. $NASI ended the week at +554.2 versus the moving average at +569.2. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. Once again, the MACD line ended the week below the signal line, so this component indicator remains bearish. The MACD of $NASI is +43.585 while the signal line is +8764.328. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator will remain bearish as long as the two component indicators are both flashing bearish signals. The indicator would trigger a new bullish signal if the two component indicators were both flashing bullish signals. The indicator would trigger a new neutral signal if the two component indicators are flashing contradictory signals.
  • The AAII Investor Bullish Sentiment climbed 4.3 percentage points this week to 35.6%, its highest reading in five weeks. This indicator will remain bullish until December 30 unless bullish sentiment falls below 25% and then moves back above it, thereby triggering a confirming bullish signal. If this takes place, the “stale date” for the indicator would be pushed forward six months. If there is not a confirming bullish signal before then the indicator will go “stale” and revert to neutral on December 30. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending August 19, 2016, two CI Market Dashboard indicators are bullish, three are neutral and four are bearish.

Start the Discussion!






8/12/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) eked out a 0.2% gain this week to close at 18,576.47, just 0.2% off the all-time high close set on Thursday. We will wait to see if the 18,600 mark offers any resistance moving forward. To the downside, the 18,200 level, which had previously served as resistance, may offer support. Below that is round-number support at 18,000 and the 50-day moving average at 18,130.39.

The S&P 500 Index (SPX) was basically flat this week, edging upward 0.04% to 2,184.05. This is only 0.08% off of the all-time high close set on Thursday. The large-cap index has been trading in a narrow range for over a month. According to The Wall Street Journal, the index has not had a move—up or down—of more than 1% since July 8. To the downside, the 2,160 level has been offering support for the last month. Below that is the 50-day moving average at 2,127.32.

According to the Select Sector SPDRs website, eight of the 11 S&P Select Sector SPDRs posted gains this week. The biggest loser for the week was Utilities (XLU), which fell 1.24%. On the heels of a rebound in oil prices to three-week highs, the energy sector (XLE) posted the biggest gains, up 2.09%. Technology (XLK) was up 1.2% for the week.

The broad market Wilshire 5000 (W5000) added 0.11% this week to close at 22,659.36. This index, too, posted a new all-time high close on Thursday. The index has managed to break through the 22,500 level that was holding it back for several trading sessions, so we will see if that turns into support moving forward. Below that is round-number support at 22,250 and the 50-day moving average at 22,031.77.

The tech-laden Nasdaq Composite (COMP) picked up 0.2% this week to close at 5,232.90, a new all-time high close. We look for round-number support at the 5,200 level and below that is round-number support at 5,000.

The Russell 2000 (RUT) index of small stocks dipped 0.12% this week to 1,229.82. This is 0.16% below the new all-time high close set on Tuesday. After moving above the highs of last December around 1,200, we look to that level for support moving forward. Below that is the 50-day moving average at 1,183.06.

The CBOE Volatility Index (VIX) posted a 1.4% weekly gain to end the week at 11.55. This is well below the 50-day moving average of 14.95 and the 200-day moving average of 17.01.

Computerized Investing Market Dashboard Indicators

Since the last update, one of the Market Dashboard indicators triggered a new bearish sign (from bullish) and another triggered a new neutral signal (from bullish). In addition, one of the indicators triggered a confirming bearish signal.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) gained 0.2% this week to close at $109.20. The ETF once again ended the week above its 100-day moving average, so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $104.41. The spread between the IYY closing price and the moving average is at 4.6%. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. If the IYY were to close the week below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average were basically the same, the indicator would revert to neutral.
  • The MACD of IYY ended the week below its signal line. Since the last update, the MACD has made a bearish crossover blow the signal line, so this indicator is now bearish. The MACD of IYY stands at +0.834 while the signal line is at +0.900. As long as the MACD ends the week below its signal line with “meaningful” separation, this indicator will remain bearish. The indicator would trigger a new bullish signal if the MACD of IYY created meaningful separation above the signal line. The indicator would trigger a new neutral signal if the MACD line and its signal line ended the week basically even.
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 74.672, basically unchanged from last week’s reading of 74.601. Since the last update, however, the indicator moved below the 75% level, thereby triggering a confirming bearish signal. This indicator will remain bearish until February 10, 2017. If there has not been another confirming bearish signal by then, the signal will go “stale” and revert to neutral. A confirming bearish signal would occur if the reading climbed above the bearish threshold of 75% and then fell back below it. If there is a confirming bearish signal before February 10, 2017, the stale date would move forward six months from that date. The indicator would trigger a new bullish signal if it were to fall below the 25% bullish threshold and then climb above it in the same week.
  • The NYSE Bullish Percentage Index ($BPNYA) ended the week at 70.038, up from last week’s reading of 69.476. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above 75% and then fell back below it—the signal will go “stale” and revert to neutral on November 4. Alternatively, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing contradictory signals this week. This is a change from the last update, so this composite indicator is now neutral. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI ended the week basically even with its moving average, thereby triggering a neutral signal. $NASI ended the week at +588.10 versus the moving average at +594.35. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. Since the last update, the MACD line made a bearish crossover below the signal line, thereby triggering a new bearish signal. The MACD of $NASI is +70.971 while the signal line is +87.985. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain neutral as long as the two component indicators are flashing contradictory signals. The indicator would trigger a new bullish signal if the two component indicators were both flashing bullish signals. The indicator would trigger a new bearish signal if the two component indicators were both flashing bearish signals.
  • The AAII Investor Bullish Sentiment climbed 1.5% percentage points this week to 31.3%. This indicator will remain bullish until December 30 unless bullish sentiment once again falls below 25% and then moves back above it, thereby triggering a confirming bullish signal. If this takes place, the “stale date” for the indicator would be pushed forward six months. If there is not a confirming bullish signal before then the indicator will go “stale” and revert to neutral on December 30. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending August 12, 2016, two CI Market Dashboard indicators are bullish, four are neutral and three are bearish.

Start the Discussion!






7/22/2016

Author: Wayne A. Thorp, CFA

The Market Dashboard will not be updated again until the weekend of August 6. 

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) eked out a 0.3% gain this week to close at 18,570.85, just short of another all-time high. On Thursday, the blue-chip index saw its winning streak end at nine sessions. On Wednesday, the index had closed at its seventh straight all-time high. It seems that the 18,600 level may offer some resistance moving forward, as the index had butted against is several times recently. To the downside, the 18,200 level, which had previously served as resistance, may offer support. Below that is round-number support at 18,000 and the 50-day moving average at 17,892.04.

The S&P 500 Index (SPX) ended the week at an all-time high close of 2,175.03 after gaining 0.6% this week. The large-cap index has been trading in a narrow range for the last several sessions and we wonder if the 2,180 mark may offer resistance in the future. To the downside, we look to the previous intermediate highs around 2,120 for initial support. Below that is the 50-day moving average at 2,096.82.

Seven of the 11 S&P Select Sector SPDRs posted gains this week. The biggest loser for the week was Energy (XLE), which fell 1.31%. Technology (XLK) outpaced all sectors, posting a 1.82% gain.

The broad market Wilshire 5000 (W5000) added 0.66% this week to close at 22,536.66. Whether or not round-number support develops at 22,500 remains to be seen. Below that is round-number support at 22,000 and the 50-day moving average at 21,693.28.

The tech-laden Nasdaq Composite (COMP) climbed 1.4% this week, closing at 5,099.10. We will still have to wait to see if round-number support develops at 5,000. Below that is the 50-day moving average at 4,882.50 and the 200-day at 4,837.12.

The Russell 2000 (RUT) index of small stocks rose 0.63% this week and closed at 1,212.89. The index has lost momentum as it neared the highs of last December around 1,200. To the downside, we will wait to see if those previous highs around 1,200 turn into lines of support. Below that is the 50-day moving average at 1,154.96.

The CBOE Volatility Index (VIX) shed 5.1% this week to close at 12.02.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new neutral sign (from bullish). However, none of the indicators triggered confirming bullish or bearish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) gained 0.62% this week to close at $108.52, a new all-time high close. The ETF once again ended the week above its 100-day moving average, so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $103.06, up from last week’s reading of $102.45. The spread between the IYY closing price and the moving average stayed constant at 5.3%. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would revert to neutral.
  • The MACD of IYY once again ended the week above its signal line. Therefore, this indicator remains bullish. The MACD of IYY stands at +1.274 while the signal line is at +1.038. As long as the MACD ends the week above its signal line with “meaningful” separation, this indicator will remain bullish. The indicator would trigger a new bearish signal if the MACD of IYY created meaningful separation below the signal line. The indicator would trigger a new neutral signal if the MACD line and its signal line ended the week basically even.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +311, up from +181 a week ago. Since it has been six months since this indicator turned bullish and during that time there have not been any confirming bullish signals, this signal has gone “stale” and has reverted to neutral. This indicator will trigger a new bullish signal if the reading were to fall below the -750 level from positive territory and starts to recover, or if the reading experienced a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound. The current 10-day peak-to-trough spread for this indicator is 182 (339 – 157).
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 80.94, basically unchanged from last week’s reading of 80.895. However, this indicator remains bearish. Once again, the reading ended the week above the 75% bearish threshold. If the indicator falls back below 75% before November 4, 2016, this would signal a confirming bearish signal. However, if the reading does not fall below 75% before then, the indicator’s signal would go “stale” and revert to neutral. If there is a confirming bearish signal before November 4, then the stale date would move forward six months from that date. The indicator would trigger a new bullish signal if it were to fall below the 25% bullish threshold and then climb above it in the same week.
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 69.97, up slightly from 68.384 a week ago. This is the highest reading since April 28. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above 75% and then fell back below it—the signal will go “stale” and revert to neutral on November 4. Alternatively, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are both flashing bullish signals this week. Therefore, this composite indicator remains bullish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. Once again, $NASI ended the week above its moving average, so this component indicator remains bullish. $NASI ended the week at +585.15 versus the moving average at +537.72. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. Once again, the MACD line closed the week above the signal line. Therefore, this component indicator is bullish. The MACD of $NASI is +108.676 while the signal line is +68.525. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bullish as long as the two component indicators are both flashing bullish signals. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator would trigger a new bearish signal if the two component indicators were both flashing bearish signals. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator would trigger a new neutral signal if the two component indicators were flashing contradictory signals.
  • The AAII Investor Bullish Sentiment dipped 1.4 percentage points this week to 35.4%. This indicator will remain bullish until December 30 unless bullish sentiment once again falls below 25% and then moves back above it, thereby triggering a confirming bullish signal. If this takes place, the “stale date” for the indicator would be pushed forward six months. If there is not a confirming bullish signal before then the indicator will go “stale” and revert to neutral on December 30. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending July 22, 2016, four CI Market Dashboard indicators are bullish, three are neutral and two are bearish.

Start the Discussion!






7/22/2016

Author: Wayne A. Thorp, CFA
The Market Dashboard will not be updated again until the weekend of August 6. 

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) eked out a 0.3% gain this week to close at 18,570.85, just short of another all-time high. On Thursday, the blue-chip index saw its winning streak end at nine sessions. On Wednesday, the index had closed at its seventh straight all-time high. It seems that the 18,600 level may offer some resistance moving forward, as the index had butted against is several times recently. To the downside, the 18,200 level, which had previously served as resistance, may offer support. Below that is round-number support at 18,000 and the 50-day moving average at 17,892.04.

The S&P 500 Index (SPX) ended the week at an all-time high close of 2,175.03 after gaining 0.6% this week. The large-cap index has been trading in a narrow range for the last several sessions and we wonder if the 2,180 mark may offer resistance in the future. To the downside, we look to the previous intermediate highs around 2,120 for initial support. Below that is the 50-day moving average at 2,096.82.

Seven of the 11 S&P Select Sector SPDRs posted gains this week. The biggest loser for the week was Energy (XLE), which fell 1.31%. Technology (XLK) outpaced all sectors, posting a 1.82% gain.

The broad market Wilshire 5000 (W5000) added 0.66% this week to close at 22,536.66. Whether or not round-number support develops at 22,500 remains to be seen. Below that is round-number support at 22,000 and the 50-day moving average at 21,693.28.

The tech-laden Nasdaq Composite (COMP) climbed 1.4% this week, closing at 5,099.10. We will still have to wait to see if round-number support develops at 5,000. Below that is the 50-day moving average at 4,882.50 and the 200-day at 4,837.12.

The Russell 2000 (RUT) index of small stocks rose 0.63% this week and closed at 1,212.89. The index has lost momentum as it neared the highs of last December around 1,200. To the downside, we will wait to see if those previous highs around 1,200 turn into lines of support. Below that is the 50-day moving average at 1,154.96.

The CBOE Volatility Index (VIX) shed 5.1% this week to close at 12.02.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new neutral sign (from bullish). However, none of the indicators triggered confirming bullish or bearish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) gained 0.62% this week to close at $108.52, a new all-time high close. The ETF once again ended the week above its 100-day moving average, so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $103.06, up from last week’s reading of $102.45. The spread between the IYY closing price and the moving average stayed constant at 5.3%. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would revert to neutral.
  • The MACD of IYY once again ended the week above its signal line. Therefore, this indicator remains bullish. The MACD of IYY stands at +1.274 while the signal line is at +1.038. As long as the MACD ends the week above its signal line with “meaningful” separation, this indicator will remain bullish. The indicator would trigger a new bearish signal if the MACD of IYY created meaningful separation below the signal line. The indicator would trigger a new neutral signal if the MACD line and its signal line ended the week basically even.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +311, up from +181 a week ago. Since it has been six months since this indicator turned bullish and during that time there have not been any confirming bullish signals, this signal has gone “stale” and has reverted to neutral. This indicator will trigger a new bullish signal if the reading were to fall below the -750 level from positive territory and starts to recover, or if the reading experienced a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound. The current 10-day peak-to-trough spread for this indicator is 182 (339 – 157).
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 80.94, basically unchanged from last week’s reading of 80.895. However, this indicator remains bearish. Once again, the reading ended the week above the 75% bearish threshold. If the indicator falls back below 75% before November 4, 2016, this would signal a confirming bearish signal. However, if the reading does not fall below 75% before then, the indicator’s signal would go “stale” and revert to neutral. If there is a confirming bearish signal before November 4, then the stale date would move forward six months from that date. The indicator would trigger a new bullish signal if it were to fall below the 25% bullish threshold and then climb above it in the same week.
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 69.97, up slightly from 68.384 a week ago. This is the highest reading since April 28. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above 75% and then fell back below it—the signal will go “stale” and revert to neutral on November 4. Alternatively, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are both flashing bullish signals this week. Therefore, this composite indicator remains bullish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. Once again, $NASI ended the week above its moving average, so this component indicator remains bullish. $NASI ended the week at +585.15 versus the moving average at +537.72. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. Once again, the MACD line closed the week above the signal line. Therefore, this component indicator is bullish. The MACD of $NASI is +108.676 while the signal line is +68.525. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bullish as long as the two component indicators are both flashing bullish signals. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator would trigger a new bearish signal if the two component indicators were both flashing bearish signals. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator would trigger a new neutral signal if the two component indicators were flashing contradictory signals.
  • The AAII Investor Bullish Sentiment dipped 1.4 percentage points this week to 35.4%. This indicator will remain bullish until December 30 unless bullish sentiment once again falls below 25% and then moves back above it, thereby triggering a confirming bullish signal. If this takes place, the “stale date” for the indicator would be pushed forward six months. If there is not a confirming bullish signal before then the indicator will go “stale” and revert to neutral on December 30. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending July 22, 2016, four CI Market Dashboard indicators are bullish, three are neutral and two are bearish.

Start the Discussion!






7/22/2016

Author: Wayne A. Thorp, CFA

The Market Dashboard will not be updated again until the weekend of August 6. 


Weekly Market Summary

The Dow Jones Industrial Average (DJIA) eked out a 0.3% gain this week to close at 18,570.85, just short of another all-time high. On Thursday, the blue-chip index saw its winning streak end at nine sessions. On Wednesday, the index had closed at its seventh straight all-time high. It seems that the 18,600 level may offer some resistance moving forward, as the index had butted against is several times recently. To the downside, the 18,200 level, which had previously served as resistance, may offer support. Below that is round-number support at 18,000 and the 50-day moving average at 17,892.04.

The S&P 500 Index (SPX) ended the week at an all-time high close of 2,175.03 after gaining 0.6% this week. The large-cap index has been trading in a narrow range for the last several sessions and we wonder if the 2,180 mark may offer resistance in the future. To the downside, we look to the previous intermediate highs around 2,120 for initial support. Below that is the 50-day moving average at 2,096.82.

Seven of the 11 S&P Select Sector SPDRs posted gains this week. The biggest loser for the week was Energy (XLE), which fell 1.31%. Technology (XLK) outpaced all sectors, posting a 1.82% gain.

The broad market Wilshire 5000 (W5000) added 0.66% this week to close at 22,536.66. Whether or not round-number support develops at 22,500 remains to be seen. Below that is round-number support at 22,000 and the 50-day moving average at 21,693.28.

The tech-laden Nasdaq Composite (COMP) climbed 1.4% this week, closing at 5,099.10. We will still have to wait to see if round-number support develops at 5,000. Below that is the 50-day moving average at 4,882.50 and the 200-day at 4,837.12.

The Russell 2000 (RUT) index of small stocks rose 0.63% this week and closed at 1,212.89. The index has lost momentum as it neared the highs of last December around 1,200. To the downside, we will wait to see if those previous highs around 1,200 turn into lines of support. Below that is the 50-day moving average at 1,154.96.

The CBOE Volatility Index (VIX) shed 5.1% this week to close at 12.02.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new neutral sign (from bullish). However, none of the indicators triggered confirming bullish or bearish signals this week.

Here is a recap of the Market Dashboard indicators for this week:

  • The iShares Dow Jones U.S. Index Fund (IYY) gained 0.62% this week to close at $108.52, a new all-time high close. The ETF once again ended the week above its 100-day moving average, so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $103.06, up from last week’s reading of $102.45. The spread between the IYY closing price and the moving average stayed constant at 5.3%. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would revert to neutral.
  • The MACD of IYY once again ended the week above its signal line. Therefore, this indicator remains bullish. The MACD of IYY stands at +1.274 while the signal line is at +1.038. As long as the MACD ends the week above its signal line with “meaningful” separation, this indicator will remain bullish. The indicator would trigger a new bearish signal if the MACD of IYY created meaningful separation below the signal line. The indicator would trigger a new neutral signal if the MACD line and its signal line ended the week basically even.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +311, up from +181 a week ago. Since it has been six months since this indicator turned bullish and during that time there have not been any confirming bullish signals, this signal has gone “stale” and has reverted to neutral. This indicator will trigger a new bullish signal if the reading were to fall below the -750 level from positive territory and starts to recover, or if the reading experienced a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound. The current 10-day peak-to-trough spread for this indicator is 182 (339 – 157).
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 80.94, basically unchanged from last week’s reading of 80.895. However, this indicator remains bearish. Once again, the reading ended the week above the 75% bearish threshold. If the indicator falls back below 75% before November 4, 2016, this would signal a confirming bearish signal. However, if the reading does not fall below 75% before then, the indicator’s signal would go “stale” and revert to neutral. If there is a confirming bearish signal before November 4, then the stale date would move forward six months from that date. The indicator would trigger a new bullish signal if it were to fall below the 25% bullish threshold and then climb above it in the same week.
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 69.97, up slightly from 68.384 a week ago. This is the highest reading since April 28. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above 75% and then fell back below it—the signal will go “stale” and revert to neutral on November 4. Alternatively, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are both flashing bullish signals this week. Therefore, this composite indicator remains bullish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. Once again, $NASI ended the week above its moving average, so this component indicator remains bullish. $NASI ended the week at +585.15 versus the moving average at +537.72. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. Once again, the MACD line closed the week above the signal line. Therefore, this component indicator is bullish. The MACD of $NASI is +108.676 while the signal line is +68.525. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bullish as long as the two component indicators are both flashing bullish signals. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator would trigger a new bearish signal if the two component indicators were both flashing bearish signals. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator would trigger a new neutral signal if the two component indicators were flashing contradictory signals.
  • The AAII Investor Bullish Sentiment dipped 1.4 percentage points this week to 35.4%. This indicator will remain bullish until December 30 unless bullish sentiment once again falls below 25% and then moves back above it, thereby triggering a confirming bullish signal. If this takes place, the “stale date” for the indicator would be pushed forward six months. If there is not a confirming bullish signal before then the indicator will go “stale” and revert to neutral on December 30. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending July 22, 2016, four CI Market Dashboard indicators are bullish, three are neutral and two are bearish.

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7/15/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) advanced 2% this week to close at 18,516.55, a new all-time-high close. The blue-chip index has posted six straight winning trading sessions and its third consecutive weekly win. To the downside, we look to the prior intermediate high just below 18,200 as an initial support line. Following that is round-number support at 18,000 and the 50-day moving average at 17,811.47.

The S&P 500 Index (SPX) picked up 1.5% this week and closed at 2,161.74. While the large-cap index wasn’t able to end the week at a new all-time high, it had done so the previous four trading sessions. To the downside, we look to the previous intermediate highs around 2,120 for initial support. Below that is the 50-day moving average at 2,086.25.

All but one of the 11 S&P Select Sector SPDRs posted gains this week. The only loser was utilities (XLU), which was hurt by rising expectations that the Federal Reserve will increase interest rate at the next FOMC meeting. The biggest gainer for the week was materials (XLB), which posted a 3.88% gain. Technology (XLK) was up 1.99% this week.

The broad market Wilshire 5000 (W5000) climbed 1.58% this week to close at 22,388.88. It is now within 0.47% of a new all-time-high close. We still look to the previous intermediate highs around 22,000 for initial support. Below that is the 50-day moving average at 21,578.23.

The tech-laden Nasdaq Composite (COMP) picked up 1.5% for the week, closing at 5,029.59. The index broke through key psychological resistance at the 5,000 level and we will have to wait and see if that turns into a near-term support level. We will continue to look to 50-day and 200-day moving averages for support, which are in the 4,825 to 4,850 range. Just below them is round-number support at the 4,800 level.

The Russell 2000 (RUT) index of small stocks jumped 2.37% this week and closed at 1,205.31. After breaking through the intermediate highs of early June, the index ran out of steam near the highs of late last year just above 1,200. To the downside we feel the 1,200 will offer initial support If that fails to hold, the next support line would be just above 1,180.

The CBOE Volatility Index (VIX) dropped 4% this week at 12.67, its lowest weekly close in nearly a year.

Computerized Investing Market Dashboard Indicators

This week, none of the Market Dashboard indicators switched signals. Furthermore, none of the indicators triggered confirming bullish or bearish signals this week.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) added 1.54% this week to close at $107.85. The ETF once again ended the week above its 100-day moving average, so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $102.45, up sharply from last week’s reading of $101.82. The spread between the IYY closing price and the moving average widened this week to +5.3% from +4.3% a week ago. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would revert to neutral.
  • The MACD of IYY once again ended the week above its signal line. Therefore, this indicator remains bullish. The MACD of IYY stands at +1.079 while the signal line is at +0.626. As long as the MACD ends the week above its signal line with “meaningful” separation, this indicator will remain bullish. The indicator would trigger a new bearish signal if the MACD of IYY created meaningful separation below the signal line. The indicator would trigger a new neutral signal if the MACD line and its signal line ended the week basically even.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +249, down from +315 a week ago. This indicator will remain bullish until July 22, 2016. If it does not trigger a confirming bullish signal before then, the signal will revert to neutral on that date. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading experiences a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger a confirming bullish signal and would reset the “stale date” forward six months. The current 10-day peak-to-trough spread for this indicator is 252 (404 – 152).
  • The percentage of NYSE stocks reaching a new 52-week high this week stands at 20.74%, up from 17.74% a week ago. However, the indicator remains neutral since the reading did not fall from above the 25% bearish threshold this week. There is no bullish threshold for the lower range of this indicator. There were 2,158 NYSE stocks posting a gain this week compared to 2,073 a week ago. In contrast, 984 stocks ended the week with a loss. The ratio of winners to losers is currently 2.19, up from last week’s 1.94. There were 659 NYSE stocks that closed the week at a new 52-week high, an increase from last week’s 564. By means of comparison, 11 NYSE stocks closed this week at a new 52-week low. This indicator remains neutral. The percentage of NYSE stocks reaching new highs needs to rise above the 25% bearish threshold and then fall below it in order to trigger a bearish signal. The last time the reading was above the 25% bearish threshold was May 24, 2013. The next week the reading fell below 25%, triggering a bearish signal. The indicator reverted to neutral six months later, on November 21, 2014, having failed to generate another confirming bearish signal.4
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 80.895, up sharply from 69.54 at the end of last week. However, this indicator remains bearish. In addition, the reading moved above the 75% bearish threshold this week. If the indicator falls back below 75% before November 4, 2014, this would signal a confirming bearish signal. However, if the reading does not fall below 75% before then, the indicator’s signal would go “stale” and revert to neutral. If there is a confirming bearish signal before November 4, then the stale date would move forward six months from that date.
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 68.384, up from 60.59 a week ago. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above 75% and then fell back below it—the signal will go “stale” and revert to neutral on November 4. Alternatively, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are both flashing bullish signals this week. Therefore, this composite indicator remains bullish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. Once again, $NASI ended the week above its moving average, so this component indicator remains bullish. $NASI ended the week at +471.03 versus the moving average at +376.44. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. Once again, the MACD line closed the week above the signal line. Therefore, this component indicator is bullish. The MACD of $NASI is +56.636 while the signal line is +12.64. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bullish as long as the two component indicators are both flashing bullish signals. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator would trigger a new bearish signal if the two component indicators were both flashing bearish signals. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator would trigger a new neutral signal if the two component indicators were flashing contradictory signals.
  • The AAII Investor Bullish Sentiment reading rose 5.8 percentage points this week to 36.9%. This indicator will remain bullish until December 30 unless bullish sentiment once again falls below 25% and then moves back above it, thereby triggering a confirming bullish signal. If this takes place, the “stale date” for the indicator would be pushed forward six months. If there is not a confirming bullish signal before then the indicator will go “stale” and revert to neutral on December 30. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending July 15, 2016, five CI Market Dashboard indicators are bullish, two are neutral and two are bearish.

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7/8/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) added 1.4% this week to close at 18,146.74, its highest close since May 2015 and less than 1% away from its all-time high close. The index blue-chip index didn’t have any problems powering through the 18,000 level. It flirted with the 50-day moving average earlier this week and we look to it for initial downside support. Below that is the 17,400 level, which had offered support in mid-May, followed by the 200-day moving average at 17,293.16.

The S&P 500 Index (SPX) climbed 1.3% to close the week at 2,129.90. This, too, was its highest close since May 2015 and Friday’s intra-day high of 2,131.71 was breached the all-time-high closing level. To the downside, we think the 50-day moving average may offer lukewarm support, with the 2,040 level perhaps offering more solid support. Below that is the 200-day moving average at 2,025.94.

The broad market Wilshire 5000 (W5000) rose 1.4% this week to close at 22,040.71, regaining key round-number levels above 22,000. We are unsure if 22,000 will turn into round-number support to the downside, however. Instead, we look to the 50-day moving average at 21,486.16 for initial support. Below that is the 21,250 level and the 200-day moving average at 20,955.35.

The tech-laden Nasdaq Composite (COMP) rose 1.9% for the week to 4,956.76. To the upside, the 5,000 mark may offer some resistance in the coming days. To the downside, the index tested its 50- and 200-day moving averages this week, but both held at week’s end. We will continue to look to the moving averages for support. Just below them is round-number support at the 4,800 level.

The Russell 2000 (RUT) index of small stocks gained 1.8% this week and closed at 1,177.36. The index is nearing the intermediate highs from early June, which may be a speedbump to the upside. The 50-day moving average at 1,138.80 is the first support level, followed by the 200-day moving average at 1,113.79.

The CBOE Volatility Index (VIX) lost 10.6% this week to 13.2, its lowest close since late May.

Computerized Investing Market Dashboard Indicators

This week, two of the Market Dashboard indicators triggered new bullish signals (both switching from neutral). However, none of the indicators triggered a confirming bullish or bearish signal this week.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) climbed 1.3% this week to reach a new all-time close of $106.21. The ETF once again ended the week above its 100-day moving average, so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $101.82, up from last week’s reading of $101.28. The spread between the IYY closing price and the moving average widened this week to +4.3% from +3.5% a week ago. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • The MACD of IYY closed the week having created meaningful space to the upside between it and its signal line. As a result, this indicator triggered a new bullish signal. The MACD of IYY stands at +0.346 while the signal line is at +0.09. As long as the MACD ends the week above its signal line with “meaningful” separation, this indicator will remain bullish. The indicator would trigger a new bearish signal if the MACD of IYY created meaningful separation to the downside of the signal line. The indicator would trigger a new neutral signal if the MACD line and its signal line ended the week basically even.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +466, up from +404 a week ago. This indicator will remain bullish until July 22, 2016. If it does not trigger a confirming bullish signal before then, the signal will revert to neutral on that date. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading experiences a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger a confirming bullish signal and would reset the “stale date” forward six months. The indicator ended the week at a 10-day high, to there is no peak-to-trough spread this week.
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 69.54, up from 65.57 at the end of last week. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above 75% and then fell back below it—the signal will go “stale” and revert to neutral on November 4. Alternatively, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.5
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 60.59, down from 69.54 a week ago. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above 75% and then fell back below it—the signal will go “stale” and revert to neutral on November 4. Alternatively, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are both flashing bullish signals this week. Therefore, this composite indicator triggered a new bullish signal this week. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. Once again, $NASI ended the week above its moving average, so this component indicator remains bullish. $NASI ended the week at +195.29 versus the moving average at +137.6. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD line crossed above the signal line and remained there at week’s end. This bullish crossover means this component indicator triggered a new bullish signal. The MACD of $NASI is -18.442 while the signal line is -26.701. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bullish as long as the two component indicators are both flashing bullish signals. The indicator would trigger a new bearish signal if the two component indicators were both flashing bearish signals. The indicator would trigger a new neutral signal if the two component indicators were flashing contradictory signals.
  • The AAII Investor Bullish Sentiment reading climbed 2.1% percentage points this week to 31.1%. This indicator will remain bullish until December 30 unless bullish sentiment once again falls below 25% and then moves back above it, thereby triggering a confirming bullish signal. If this takes place, the “stale date” for the indicator would be pushed forward six months. If there is not a confirming bullish signal before then the indicator will go “stale” and revert to neutral on December 30. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending July 8, 2016, five CI Market Dashboard indicators are bullish, two are neutral and two are bearish.

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7/1/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) posted its biggest weekly gain since November, adding 3.2% to 17,949.37. On Monday, as we predicted last week, the blue-chip index fell below its 200-day moving average, but rebounded strongly to move above it and the 50-day moving average on Thursday and remained there at weeks-end. To the upside, the index may run into some resistance at the round number 18,000 mark. To the downside, we aren’t confident in the 50-day moving average offering support. So below that is the 17,400 level, which had offered support in mid-May, followed by the 200-day moving average at 17,263.66.

The S&P 500 Index (SPX) finished the week with a 3.2% gain—also its best weekly gain since November—to 2,102.95. After starting the week by violating its 200-day moving average, the large-cap index recovered to reclaim the ground above it and the 50-day moving average. We believe the index will run into resistance around the 2,210 to the upside as it nears a new all-time high. To the downside, we feel the 50-day moving offers fleeting support at best, so instead we look to the 200-day moving average at 2,023.15 for initial meaningful support. Below that is round-number support at the 2,000 mark.

All of the 11 S&P Select Sector SPDR ETFS posted gains over the last five trading days. Real estate (XLRE) surged by 4.4%, while Materials (XLB) was the laggard by adding 0.7%. Technology (XLK) stocks added 2.8% over the last five trading days.

The broad market Wilshire 5000 (W5000) rose 3.0% this week to close at 21,739.07. Following the path of the other major indexes this week, the Wilshire 5000 fell below its 200-day moving average on Monday and promptly reversed course. At the end of the week, the index had moved above both its 200- and 50-day moving averages. The first meaningful support level exists at round-number support at 21,000 followed by the 200-day moving average at 20,934.82.

The tech-laden Nasdaq Composite (COMP) ended the week at 4,862.57 after climbing 3.3%. The index had already fallen below its 50- and 200-day moving averages last week, but the market-wide recovery pushed the index back above both trend lines this week. Prior to last week’s Brexit sell-off, the 200-day moving average was offering support, so we will look to it for initial downside support. Below that is this week’s intermediate low around 4,600.

The Russell 2000 (RUT) index of small stocks gained 2.6% this week and closed at 1,156.77. The index closed below its 200-day moving average on Monday but was also able to regain the 200- and 50-day moving averages by the close of the week. We view this week’s intermediate low around 1,090 at initial support, which had also held in mid-May.

The CBOE Volatility Index (VIX) plummeted 42.6% this week to 14.77, falling below both its 50- and 200-day moving averages.

Computerized Investing Market Dashboard Indicators

This week, two of the Market Dashboard indicators triggered new neutral signals (both from bearish). In addition, one of the indicators triggered a confirming bullish signal this week.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) added 3.2% this week to close at $104.87. The index fell and closed below its 100-day moving average on Monday. However, it recovered and closed back above it at the close of the week. Since we are only concerned with its end-of-week position relative to the moving average, this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $101.28, up from $100.77 a week ago. The spread between the IYY closing price and the moving average widened this week to +3.5% from +0.83% last week. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • The MACD of IYY closed basically even with its signal line this week. Since there is no meaningful gap between the MACD of IYY and the signal line, this indicator triggered a new neutral signal. The MACD of IYY stands at -0.029 while the signal line is at -0.051. As long as there is no “meaningful” separation between the MACD of IYY and the signal line at the end of the week this indicator will remain neutral. The indicator would trigger a new bearish signal if the MACD of IYY created meaningful separation to the downside of the signal line. The indicator would trigger a new bullish signal if the MACD ends the trading week with a “meaningful” gap above the signal line.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +565, up from last week’s reading of +193. This indicator will remain bullish until July 22, 2016. If it does not trigger a confirming bullish signal before then, the signal will revert to neutral on that date. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading experiences a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger a confirming bullish signal and would reset the “stale date” forward six months. The indicator ended the week at a 10-day high, to there is no peak-to-trough spread this week.
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 65.57, a sharp rebound from last week’s reading of 43.16. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above 75% and then fell back below it—the signal will go “stale” and revert to neutral on November 4. Alternatively, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 57.81, down from 62.40 at the close of last week. This indicator will remain bearish until October 28. If the indicator rises above the 70% bearish threshold and then falls above it, this would trigger a confirming bearish signal. If there is not a confirming bearish signal before October 28, the signal will go “stale” and revert to neutral. If there is a confirming bearish signal before then, the “stale date” would be pushed forward six months. Alternatively, the indicator would trigger a new bullish signal by falling below the 30% bullish threshold and then rising back above that level.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are flashing conflicting signals this week. As a result, for the second week in a row, this composite indicator has triggered a new signal; this time from bearish to neutral. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI moved back above the moving average and ended the week there. This bullish crossover triggered a new bullish signal for this component indicator. $NASI ended the week at +91.24 versus the moving average at +65.99. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD line once again closed below the signal line so this component indicator remains bearish. The MACD of $NASI is -40.385 while the signal line is -26.701. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain neutral as long as the two component indicators are flashing contradictory signals. Indicator would trigger a new bullish signal if both component indicators are both flashing bullish signals. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator would trigger a new bearish signal if the two component indicators were both flashing bearish signals.
  • The AAII Investor Bullish Sentiment reading climbed 6.9 percentage points this week to 28.9%. By climbing above the 25% bullish threshold this week, this indicator triggered a confirming bullish signal. This indicator will remain bullish until December 30 unless bullish sentiment once again falls below 25% and then moves back above it, thereby triggering another confirming bullish signal. If this takes place, the “stale date” for the indicator would be pushed forward six months. If there is not a confirming bullish signal before then the indicator will go “stale” and revert to neutral on December 30. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending July 1, 2016, three CI Market Dashboard indicators are bullish, four are neutral and two are bearish.

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6/24/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

On Friday, the global markets reacted harshly to the “Brexit” referendum results in the United Kingdom. Although Friday saw large losses on the financial markets, the overall weekly impact was more subdued. This AAII Blog post will help you keep things in perspective during these periods of market turmoil.

The Dow Jones Industrial Average (DJIA) lost 1.6% over the week to close at 17,399.86. On Friday, the Blue Chip index dropped 3.4%, yet found support at the 17,400 level, which offered support in mid-May. We would not be surprised, though, if this support line fails in next week’s trading, but below that level is the 200-day moving average at 17,235.41.

The S&P 500 Index (SPX) was down 1.7% for the week to 2,037.30. This was after losing 3.6% on Friday. The large-cap index, however, did find temporary support at its mid-May lows around the 2,020 mark. This level has held on multiple occasions since April.

None of the 11 S&P Select Sector SPDR ETFS posted gains over the last five trading days. Financial services (XLFS) bore the brunt of the reaction to Brexit, tumbling 3.29%. Real estate (XLRE) almost broke even for the week, ticking downward by only 0.03%. Technology (XLK) stocks ended the week with a 1.79% loss.

The broad market Wilshire 5000 (W5000) index fell 1.5% this week and closed at 21,102.32. Following the path of the other major indexes this week, the Wilshire 5000 fell sharply on Friday—down 3.57%--but found support near its mid-May lows and round-number support at 21,000. We will see if the 21,000 mark holds. Below that is the 200-day moving average at 20,920.87.

The tech-laden Nasdaq Composite (COMP) surrendered 1.9% for the week to 4,707.98. The index fell through both its 50- and 200-day moving averages on Friday as it lost 4.12%. The index also broke through round-number support at 4,800 but settled around the intermediate lows of May. We will wait and see if the 4,700 level holds, otherwise, the 4,600 level appears to be the next area of support.

The Russell 2000 (RUT) index of small stocks lost 1.5% this week and closed at 1,1127.54. The index fell 3.81% on Friday, violating its 50-day moving average. The 200-day moving average stands as the next support level at 1,114.80. Below that are the lows of mid-May around 1,090.

The CBOE Volatility Index (VIX) jumped 32.7% for the week after adding 49.3% on Friday to close at 25.75, its highest finish since February 11.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new bearish signal (from neutral). However, none of the indicators triggered confirming bullish or bearish signals.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) surrendered 1.5% this week and closed at $101.61. The ETF once again ended the week above its 100-day moving average, so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $100.77, up from $100.72 a week ago. The spread between the IYY closing price and the moving average now stands at +0.83%, down from last week’s spread of +2.89%. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • The MACD of IYY once again ended the week below its signal line. Therefore, this indicator remains bearish. The MACD of IYY stands at +0.065 while the signal line is at +0.273. As long as the MACD of IYY is below the signal line, this indicator will remain bearish. The indicator would trigger a new bullish signal if the MACD ends the trading week with a “meaningful” gap above the signal line. The indicator would trigger a new neutral signal if there was no “meaningful” separation between the MACD of IYY and the signal line at the end of the week.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +193, up from last week’s reading of +145. This indicator will remain bullish until July 22, 2016. If it does not trigger a confirming bullish signal before then, the signal will revert to neutral on that date. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading experiences a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger a confirming bullish signal and would reset the “stale date” forward six months. The indicator ended the week at a 10-day high, to there is no peak-to-trough spread this week.
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 43.16, down sharply from last week’s reading of 56.3. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above 75% and then fell back below it—the signal will go “stale” and revert to neutral on November 4. Alternatively, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 62.40, down from 62.40 at the close of last week. This indicator will remain bearish until October 28. If the indicator rises above the 70% bearish threshold and then falls above it, this would trigger a confirming bearish signal. If there is not a confirming bearish signal before October 28, the signal will go “stale” and revert to neutral. If there is a confirming bearish signal before then, the “stale date” would be pushed forward six months. Alternatively, the indicator would trigger a new bullish signal by falling below the 30% bullish threshold and then riding back above that level.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation composite indicator are both flashing bearish signals this week. This has triggered a new bearish signal for the composite indicator. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI once again finished below the moving average. Therefore, this component indicator is BEARISH. $NASI ended the week at +93.30 versus the moving average at +128.01. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD line moved below the signal line. This bearish crossover triggered a new BEARISH signal for this component indicator. The MACD of $NASI is -17.706 while the signal line is -1.91. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bearish as long as the two component indicators are flashing bearish signals. The indicator would trigger a new bullish signal when two component indicators are both flashing bullish signals. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator would trigger a new neutral signal of the two component indicators were flashing contradictory signals.
  • The AAII Investor Bullish Sentiment reading fell 3.4 percentage points this week to 22.0%. This indicator remains bullish. This week, the indicator fell below the 25% bullish threshold. If bullish sentiment rises back above 25% before December 2, this would trigger a confirming bullish signal. This, in turn, would push the stale date for the indicator forward six months. If there is not a confirming bullish signal before then the indicator will go “stale” on that date and revert to neutral on December 2. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending June 24, 2016, three CI Market Dashboard indicators are bullish, two are neutral and four are bearish.

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6/17/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) lost 1.1% week-over-week to close at 17,675.16. The Blue Chip index fell through its 50-day moving average this week but settled around the 17,600 level. We will wait to see if this provides near-term support moving forward. Below that are the mid-May lows around 17,400.

The S&P 500 Index (SPX) was down 1.2% for the week to 2,071.22. The large-cap index slipped below its 50-day moving average and, at least for this week, the moving average now seems to be offering resistance to the upside. We look to recent intermediate lows around 2,040, which have held on multiple occasions since April, for initial support.

Only one 11 S&P Select Sector SPDR ETFs closed the week with a gain. The Real Estate (XLRE) sector eked out a 0.06% gain over the last five trading days. Financial Services (XLFS), down 2.98%, and Financials (XLF), down 2.37%, were among the worst sector performers following the announcement that the Fed would not raise interest rates. Technology (XLK) stocks ended the week with a 2.07% loss.

The broad market Wilshire 5000 (W5000) index fell 1.2% this week and closed at 21,431.14. Following the path of the other major indexes this week, the Wilshire 5000 fell below its 50-day moving average and tried, but failed, to regain the high ground. We now look to round-number support at the 21,000 level.

The tech-laden Nasdaq Composite (COMP) dropped 1.9% for the week to 4,800.33. The index violated its 50-day moving average but found round-number support at 4,800. Just below that is the 200-day moving average at 4,817.52.

The Russell 2000 (RUT) index of small stocks lost 1.7% this week and closed at 1,144.70. To the downside, the 1,140 level looks to offer initial support, followed by the 50-day (1,135.25) and 200-day (1,114.69) moving averages.

The CBOE Volatility Index (VIX) advanced 14% this week to 19.41.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new bearish signal (from bullish) and another triggered a new neutral signal (from bullish). However, none of the indicators triggered confirming bullish or bearish signals.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) surrendered 1.2% this week and closed at $103.63. However, the ETF once again closed above its 100-day moving average, so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $100.72, up from $100.18 a week ago. The spread between the IYY closing price and the moving average now stands at +2.89%, down from last week’s spread of +4.67%. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator would trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • This week, the MACD of IYY moved below its signal line and closed the week in that position. This bearish crossover has triggered a new bearish signal for this indicator. The MACD of IYY stands at +0.216 while the signal line is at +0.458. As long as the MACD of IYY is below the signal line, this indicator will remain bearish. The indicator would trigger a new bullish signal if the MACD ends the trading week with a “meaningful” gap above the signal line. The indicator would trigger a new neutral signal if there was no “meaningful” separation between the MACD of IYY and the signal line at the end of the week.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +145, down from last week’s reading of +211. This indicator will remain bullish until July 22, 2016. If it does not trigger a confirming bullish signal before then, the signal will revert to neutral on that date. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading experiences a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger a confirming bullish signal and would reset the “stale date” forward six months. At the close of this week, the 10-day peak-to-trough spread for the indicator is 258 (270 – 12).
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 56.3, down from last week’s 67.03. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above 75% and then fell back below it—the signal will go “stale” and revert to neutral on November 4. Alternatively, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 64.69, down slightly from 67.41 at the close of last week. This indicator will remain bearish until October 28. If the indicator rises above the 70% bearish threshold and then falls above it, this would trigger a confirming bearish signal. If there is not a confirming bearish signal before October 28, the signal will go “stale” and revert to neutral. If there is a confirming bearish signal before then, the “stale date” would be pushed forward six months. Alternatively, the indicator would trigger a new bullish signal by falling below the 30% bullish threshold and then riding back above that level.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are flashing contradictory signals this week. As a result, this has triggered a new neutral signal for the composite indicator. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI fell below the moving average and remained there at week’s end. This bearish crossover triggered a bearish signal for this component indicator. $NASI ended the week at +162.94 versus the moving average at +222.78. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. At the close of this week, the MACD line was once again above the signal line, albeit it not by much. Therefore, this component indicator remains bullish. The MACD of $NASI is +14.871 while the signal line is +11.014. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain neutral as long as the two component indicators are not in agreement. The indicator would trigger a new bullish signal when two component indicators are both flashing bullish signals. The indicator would trigger a new bearish signal if both of the component indicators were flashing bearish signals.
  • The AAII Investor Bullish Sentiment reading fell 2.5 percentage points this week to 25.3%. This indicator will remain bullish until December 2, 2016. If there is not a confirming bullish signal before then—bullish sentiment falls below 25% and then rises above it—the indicator will go “stale” on that date and revert to neutral. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending June 17, 2016, three CI Market Dashboard indicators are bullish, three are neutral and three are bearish.

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6/10/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) gained 0.3% for this week, closing at 17,865.34. The index ran into resistance at the 18,000 level and Friday’s sell-off had it testing its 50-day moving average to the downside. As such, we continue to look for the 50-day moving average (17,788.40) to offer initial support. Below the moving average are the recent lows around 17,400.

The S&P 500 Index (SPX) ticked downward 0.1% to end the week at 2,097.07. The large-cap index was able to briefly move above the 2,100 level, but it was not able to hold it. To the downside, the 50-day moving average (2,077.37) is the initial support level, followed by the recent intermediate lows around 2,040, which have held on multiple occasions since April.

Six of the nine S&P Select Sector SPDR ETFs closed the week with gains. Rebounding oil prices drove the energy sector (XLE) to the weekly win, posting a 1.25% gain. As the likelihood of a Fed rate hike this month faded, financials (XLF) were the biggest losers this week, surrendering 1.49%. Technology (XLK) stocks ended the week marginally higher, adding 0.05%.

The broad market Wilshire 5000 (W5000) dipped 0.25% this week and closed at 21,688.79. The index managed to briefly overcome resistance around 21,750, only to run into another brick wall at 22,000. The 21,500 level is our initial support level, followed by the 50-day moving average at 21,446.27.

The tech-laden Nasdaq Composite (COMP) ended the week at 4,894.55 after losing 1%. The index overcame resistance around 4,950 but fell back below it during Friday’s market downturn. To the downside, the 50-day moving average at 4,858.26 is the initial support line, followed by the 200-day moving average at 4,815.42.

The Russell 2000 (RUT) index of small stocks was relatively unchanged this week, ticking downward 0.02%. We feel that the intermediate highs of last November and December near 1,2000 may offer near-term upside resistance. To the downside, the 1,140 level may offer support, followed by the 50-day (1,130.91) and 200-day (1,114.67) moving averages may offer support.

The CBOE Volatility Index (VIX) rose 26.4% this week to 17.03, its highest finish since early March.

Computerized Investing Market Dashboard Indicators

This week, none of the Market Dashboard indicators triggered new signals. Furthermore, none of the indicators triggered confirming bullish or bearish signals.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) ticked downward 0.21% this week at close at $104.86. The ETF once again closed above its 100-day moving average, so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $100.18, up from $99.60 a week ago. The spread between the IYY closing price and the moving average now stands at +4.67%, down from last week’s spread of +5.5%. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator will trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • The MACD of IYY ended the week above its signal line, therefore, this indicator remains bullish. The MACD of IYY stands at +0.759 while the signal line is at +0.649. As long as the MACD of IYY is above the signal line, this indicator will remain bullish. The indicator would trigger a new bearish signal if the MACD ends the trading week with a “meaningful” gap below the signal line. The indicator would trigger a new neutral signal if there was no “meaningful” separation between the MACD of IYY and the signal line at the end of the week.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +211, down from last week’s reading of +324. This indicator will remain bullish until July 22, 2016. If it does not trigger a confirming bullish signal before then, the signal will revert to neutral on that date. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading experiences a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger a confirming bullish signal and would reset the “stale date” forward six months. At the close of this week, the 10-day peak-to-trough spread for the indicator is 61 (270 – 209).
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 67.03, down from last week’s reading of 72.52. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above 75% and then fell back below it—the signal will go “stale” and revert to neutral on November 4. Furthermore, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 67.41, up from 65.47 a week ago. This indicator will remain bearish until October 28. If the indicator rises above the 70% bearish threshold and then falls above it, this would trigger a confirming bearish signal. If there is not a confirming bearish signal before October 28, the signal will go “stale” and revert to neutral. If there is a confirming bearish signal before then, the “stale date” would be pushed forward six months. Alternatively, the indicator would trigger a new bullish signal by falling below the 30% bullish threshold and then riding back above that level.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are both flashing bullish signals this week. Therefore, the overall indicator remains bullish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI once again closed the week above the moving average. So this component indicator remains bullish. $NASI ended the week at +353.28 versus the moving average at +316.67. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. At the close of this week, the MACD line was once again above the signal line. Therefore, this component indicator remains bullish. The MACD of $NASI is +28.873 while the signal line is +45.122. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bullish as long as the two component indicators are both flashing bullish signals. The indicator would trigger a new bearish signal if both of the component indicators were flashing bearish signals. The indicator would trigger a new neutral signal if the two component indicators were flashing contradictory signals.
  • The AAII Investor Bullish Sentiment retreated 2.3 percentage points this week to 27.8%. This indicator will remain bullish until December 2, 2016. If there is not a confirming bullish signal before then—bullish sentiment falls below 25% and then climbs above it—the indicator will go “stale” on that date and revert to neutral. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending June 10, 2016, five CI Market Dashboard indicators are bullish, two are neutral and two are bearish.

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6/3/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) fell 0.4% for the week to close at 17,807.06. The index flirted with its 50-day moving average much of the week, but it held. So we look to that moving average for initial support. Below the moving average is the recent lows around 17,400.

The S&P 500 Index (SPX) was up marginally this week, ending the week at 2,099.13. The continue to monitor the 2,100 level, as it has been a bit of a speed bump the last couple of weeks. This matched the last intermediate market highs in mid-April. To the downside, the 50-day moving average (2,070.36) is the initial support level, followed by the recent intermediate lows around 2,040, which have held on multiple occasions since April.

Five of the nine S&P Select Sector SPDR ETFs were up this week. Utilities (XLU) benefited from Friday’s weak jobs report and lowered expectations of a June rate hike by the Fed. For the week, the sector added 2.56%. On the other end of the spectrum, Financials (XLF) were hurt by the possibility of rates remaining at their near-historic lows, sliding 1.26%. Technology (XLK) was down marginally this week, ticking down 0.36%.

The broad market Wilshire 5000 (W5000) clawed out a 0.19% gain this week to 21,742.32. The index ran into some resistance around 21,750, which marks the April intermediate highs. The 50-day moving average at 21,368.18 may offer initial downside support, followed by round-number support at the 21,000 level.

The tech-laden Nasdaq Composite (COMP) added 0.2% to end the week at 4,942.51. The index is finding resistance around 4,950, which matches the highs of mid-April. To the downside, the 50-day moving average at 4,845.61 is the initial support line, followed by the 200-day moving average at 4,809.80.

The Russell 2000 (RUT) index of small stocks climbed 1.2% this week to close at 1,164.14. The index powered through the highs of late-April to notch new highs for the year. To the downside, the 50-day (1,122.96) and 200-day (1,113.95) moving averages may offer support.

The CBOE Volatility Index (VIX) added 2.7% this week to close at 13.47.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new bullish signal (from neutral). In addition, one indicator triggered a confirming bullish signal.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) edged higher by 0.24% this week to close at 105.08. This is the highest weekly close since last July. The ETF once again closed above its 100-day moving average, so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $99.60, up from $99.23 a week ago. The spread between the IYY closing price and the moving average now stands at +5.5%, down slightly from +5.6% a week ago. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator will trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • For the second week in a row, the MACD of IYY ended the week above its signal line. Therefore, this indicator remains bullish. The MACD of IYY stands at +0.631 while the signal line is at +0.388. As long as the MACD of IYY is above the signal line, this indicator will remain bullish. The indicator would trigger a new bearish signal if the MACD ends the trading week with a “meaningful” gap below the signal line. The indicator would trigger a new neutral signal if there was no “meaningful” separation between the MACD of IYY and the signal line at the end of the week.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +324, up sharply from last week’s reading of +126. This indicator will remain bullish until July 22, 2016. If it does not trigger another confirming bullish signal before then, the signal will revert to neutral on that date. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading experiences a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger another confirming bullish signal and would reset the “stale date” six months forward. Since the indicator ended the week at a 10-trading-day high, there is not peak-to-trough spread this week.
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 72.52, up from last week’s reading of 67.88. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above 75% and then fell back below it—the signal will go stale on revert to neutral on November 4. Furthermore, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 65.47, an increase from 64.47 a week ago. This indicator will remain bearish until October 28. If the indicator rises above 70% bearish threshold and then falls above it, this would trigger a confirming bearish signal. If there is not a confirming bearish signal before October 28, the signal will go “stale” and revert to neutral. If there is a confirming bearish signal before then, the “stale date” would be pushed forward six months. Alternatively, the indicator would trigger a new bullish signal by falling below the 30% bullish threshold and then falling below that level.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are both flashing bullish signals this week. This, in turn, has triggered a new bullish signal for this composite indicator. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI once again closed the week above the moving average. So this component indicator remains bullish. $NASI ended the week at +215.55 versus the moving average at +144.00. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD line moved above the signal line and remained there at week’s end. This triggered a new bullish signal for this component indicator. The MACD of $NASI is -41.92 while the signal line is -68.49. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bullish as long as the two component indicators are flashing bullish signals. The indicator would trigger a new bearish signal if both of the component indicators were flashing bearish signals. The indicator would trigger a new neutral signal if the two component indicators were flashing contradictory signals.
  • The AAII Investor Bullish Sentiment jumped 12.4 percentage points this week to 30.2%. This week bullish sentiment rose above the 25% bullish threshold, thereby triggering a confirming bullish signal. The confirming bullish signal this week moved the “stale date” for this indicator forward six months to December 2. If there is not another confirming bullish signal before then—bullish sentiment falls below 25% and then climbs above it—the indicator will go stale on that date and revert to neutral. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending June 3, 2016, five CI Market Dashboard indicators are bullish, two are neutral and two are bearish.

Start the Discussion!






5/27/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) gained 2.1% this week to close at 17,873.22, snapping its longest weekly losing streak in nearly two years. The index broke above its 50-day moving average and a downward trendline that had extended from the highs of mid-April through the lower intermediate highs of late-April and mid-May. To the downside, we will have to wait to see if the 50-day moving average offers any support. Otherwise, the recent lows at 17,400 may offer support.

The S&P 500 Index (SPX) advanced 2.2% this week to 2.099.06. This index also moved above its 50-day moving average this week but may have bumped into resistance around 2,100, which is the highest level of the year. Time will tell if the moving average provides downside support. Otherwise, there are the recent intermediate lows around 2,040, which have held on multiple occasions since April.

For the first time in several weeks, all nine of the S&P Select Sector SPDR ETFs posted weekly gains. Technology (XLK) led the way, surging 3.21%. Utilities (XLU) lagged the other sectors on worries of rising interest rates, but still added 1.12% this week.

The broad market Wilshire 5000 (W5000) finished the week up 2.3% to 21,701.47. Keeping up with its fellow indexes, it too moved above its 50-day moving average this week. However, there may be some resistance around 21,750, which was the former intermediate high in mid-April. The 50-day moving average may offer initial downside support, followed by round-number support at the 21,000 level.

The tech-laden Nasdaq Composite (COMP) jumped 3.4% to end the week at 4,933.51. On Tuesday, the index powered its way above both its 50- and 200-day moving averages. We expect the index to take a breather as it attempts its assault on the 5,000 level. To the downside, we will wait to see if the moving averages provide support. Otherwise, the 4,700 level has held up to multiple tests over the last few weeks.

The Russell 2000 (RUT) index of small stocks climbed 3.4% this week to close at 1,150.45. Multiple bullish technical events took place for the index this week. On Tuesday, the index jumped above both its 50- and 200-day moving average. On the same day, the 50-day moving average moved above the 200-day moving average to form a “golden cross.” To the upside, the index is nearing the intermediate highs of late-April around 1,160. To the downside, the moving averages may offer support, followed by the 1,065 mark, which served as support in March.

The CBOE Volatility Index (VIX) gave up 13.7% this week to close at 13.12.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new bullish signal (from bearish) and another triggered a new neutral signal (from bearish). However, no indicators triggered confirming bullish or bearish signals.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) gained 2.3% this week to close at $104.83. Since the ETF closed above its 100-day moving average this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $99.23, up slightly from last week’s $99.13. The spread between the IYY closing price and the moving average now stands at +5.6%, an increase over +3.4% a week ago. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator will trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • This week the MACD of IYY moved above its signal line and remained there at week’s end. This bullish crossover triggered a new bullish signal. The MACD of IYY stands at +0.346 while the signal line is at +0.137. As long as the MACD of IYY is above the signal line, this indicator will remain BULLISH. The indicator would trigger a new bearish signal if the MACD ends the trading week with a “meaningful” gap below the signal line. The indicator would trigger a new neutral signal if there was no “meaningful” separation between the MACD of IYY and the signal line at the end of the week.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +126, up from last week’s reading of +43. This indicator will remain bullish until July 22, 2016. If it does not trigger another confirming bullish signal before then, the signal will revert to neutral on that date. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading experiences a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger another confirming bullish signal and would reset the “stale date” six months forward. Over the last 10 days, the peak-to-trough spread in the values of this indicator is 20 points (+146 to +126).
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 67.88, an increase from last week’s reading of 52.48. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above 75% and then fell back below it—the signal will go stale on revert to neutral on November 4. Furthermore, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 64.47, a slight increase from 62.45 a week ago. This indicator will remain bearish until October 28. If the indicator rises above 70% bearish threshold and then falls above it, this would trigger a confirming bearish signal. If there is not a confirming bearish signal before October 28, the signal will go “stale” and revert to neutral. If there is a confirming bearish signal before then, the “stale date” would be pushed forward six months. Alternatively, the indicator would trigger a new bullish signal by falling below the 30% bullish threshold and then falling below that level.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are not flashing uniform signals this week, so this indicator has triggered a new neutral signal. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, the $NASI moved above the moving average and remained there at week’s end. This bullish crossover triggered a new bullish signal for this component indicator. $NASI ended the week at +51.34 versus the moving average at +9.75. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line once again ended the week below the signal line. Therefore, this component indicator remains bearish. The MACD of $NASI is -93.487 while the signal line is -81.712. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain neutral as long as the two component indicators are flashing contradictory signals. The indicator would trigger a new bearish signal if both of the component indicators were flashing bearish signals. The indicator would trigger a new bullish signal if the two component indicators were flashing bullish signals.
  • The AAII Investor Bullish Sentiment reading fell 1.6 percentage points this week to 17.8%. This is the lowest level since April 14, 2005, or 580 weeks. This is also only the 31st weekly reading below 20% since the survey’s inception in 1987. This indicator remains bullish. The bullish sentiment reading remains below the 25% bullish threshold. If and when the reading moves back above 25%, this would trigger a confirming bullish signal. If this does not happen before August 19, 2016, the current bullish signal will go stale and revert to neutral. If there is another confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending May 27, 2016, four CI Market Dashboard indicators are bullish, three are neutral and two are bearish.

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5/20/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) shed 0.2% this week to close at 17,500.94, extending its longest weekly losing streak since October 2014. The index broke through support from early April but appears to have found near-term support around 17,500.

The S&P 500 Index (SPX) rose 0.3% this week to 2.052.32. However, earlier this week the index fell below its 50-day moving average but seemed to find near-term support around 2,040. Below that is the 200-day moving average at 2,011.07.

This week, five of the nine S&P Select Sector SPDR ETFs were up. The energy sector (XLE) led the way with a 1.8% gain while Utilities (XLU) were down 2.23% on worries that the Fed will be raising rates in June. Technology (XLX) added 1.23% for the week.

The broad market Wilshire 5000 (W5000) finished the week up 0.48% to 21,218.34. After closing below its 50-day moving average last Friday, the index was not able to recapture the high ground. We look for initial support at the 21,000 level. Below that is the 200-day moving average at 20,864.71.

The tech-laden Nasdaq Composite (COMP) jumped 1.1% to end the week at 4,769.56. The index once again tested the 4,700 mark, a level that has survived multiples assaults over the last few weeks.

The Russell 2000 (RUT) index of small stocks fell 0.89% this week to close at 1,112.28. The index tried to break above the 50-day moving average on Friday but fell just short. The next line of support appears to be around the 1,065 mark, which served as support in March.

The CBOE Volatility Index (VIX) added 1.1% this week to close at 15.20

Computerized Investing Market Dashboard Indicators

This week, none of the Market Dashboard indicators triggered new bearish or bullish signals. Furthermore, no indicators triggered confirming bullish or bearish signals.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) rose 0.4% this week to close at $102.46. Since the ETF closed above its 100-day moving average this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $99.13. The spread between the IYY closing price and the moving average stands at +3.4%. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator will trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • The MACD of IYY ended the week below its signal line so this indicator remains bearish. The MACD of IYY stands at -0.108 while the signal line is at +0.080. As long as the MACD of IYY is below the signal line, this indicator will remain bearish. The indicator would trigger a new bullish signal if the MACD ends the trading week with a “meaningful” gap above the signal line. The indicator would trigger a new neutral signal if there was no “meaningful” separation between the MACD of IYY and the signal line at the end of the week.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +43. This indicator will remain bullish until July 22, 2016. If it does not trigger another confirming bullish signal before then, the signal will revert to neutral on that date. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading experiences a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger another confirming bullish signal and would reset the “stale date” six months forward. Over the last 10 days, the peak-to-trough spread in the values of this indicator is 245 points (+230 to -15).
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 52.48. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above 75% and then fell back below it—the signal will go stale on revert to neutral on November 4. Furthermore, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 62.45. This indicator will remain bearish until October 28. If the indicator rises above 70% bearish threshold and then falls above it, this would trigger a confirming bearish signal. If there is not a confirming bearish signal before October 28, the signal will go “stale” and revert to neutral. If there is a confirming bearish signal before then, the “stale date” would be pushed forward six months. Alternatively, the indicator would trigger a new bullish signal by falling below the 30% bullish threshold and then falling below that level.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are both flashing bearish signals to end this week. Therefore, this indicator remains bearish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, the $NASI closed below the moving average, making this component indicator bearish. $NASI ended the week at -58.96 versus the moving average at +4.04. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line once again ended the week below the signal line. Therefore, this component indicator remains bearish. The MACD of $NASI is -90.577 while the signal line is -42.68. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bearish as long as the two component indicators are flashing bearish signals. The indicator would trigger a new bullish signal if the two component indicators were flashing bullish signals. The indicator would trigger a new neutral signal if the two component indicators are flashing contradictory signals.
  • The AAII Investor Bullish Sentiment reading fell 1.1 percentage points this week to 19.3%. This indicator remains bullish. The bullish sentiment reading remains below the 25% bullish threshold. If and when the reading moves back above 25%, this would trigger a confirming bullish signal. If this does not happen before August 19, 2016, the current bullish signal will go stale and revert to neutral. If there is another confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending May 20, 2016, three CI Market Dashboard indicators are bullish, two are neutral and four are bearish.

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5/6/2016

Author: Wayne A. Thorp, CFA
There will not be an update to the Market Dashboard the week ending May 13, 2016, while we attend the CFA Institute Annual Conference.

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) dipped 0.2% this week to close at 17,740.63. The index tested the 17,600 level, which had offered support in early April, so we look to that region for initial support.

The S&P 500 Index (SPX) shed 0.4% on a weekly basis to close at 2,057.14. This week the index tested its 50-day moving average (2,045.06), so we look to there for the first line of support. Below that are the recent intermediate lows around 2,040 and the 200-day moving average (2,012.98).

This week, four of the nine S&P Select Sector SPDR ETFs were up. Consumer Staples (XLP) led the way with a 1.8% gain. A renewed downturn in oil pushed the Energy (XLE) sector down 3.3%. Technology (XLX) eked out a 0.28% gain for the week.

The broad market Wilshire 5000 (W5000) finished the week down 0.55% at 21,258.08. This week the index tested its 50-day moving average (21,070.64), so we look there for initial downside support. The 200-day moving average is just below it at 20,906.28.

The tech-laden Nasdaq Composite (COMP) lost 0.8% to end the week at 4,736.16. The index fell through support around 4,750 but found its legs at round-number support at 4,700.

Small stocks were hit especially hard this week, as the Russell 2000 (RUT) index fell 1.4% to close at 1,114.72. This week the 200-day moving average failed to hold but the index found support at its 50-day moving average (1,102.93). Just below that is round-number support at 1,100.

The CBOE Volatility Index (VIX) shed 6.2% this week to close at 14.72.

Computerized Investing Market Dashboard Indicators

This week, two of the Market Dashboard indicators triggered new bearish signals (one from bullish and the other from neutral). However, none of Dashboard indicators triggered confirming bullish or bearish signals.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) fell 0.5% this week to close at $102.50. However, the ETF closed above its 100-day moving average so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $99.01, up from $98.97 at the end of last week. The spread between the IYY closing price and the moving average stands at +3.5%, down from +4.1% a week ago. As long as IYY ends the week above its 100-day simple moving average, the indicator is BULLISH. When IYY closes the week below its 100-day moving average, the indicator will trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • The MACD of IYY ended the week below its signal line, so this indicator remains bearish. The MACD of IYY stands at +0.272 while the signal line is at +0.652. As long as the MACD of IYY is below the signal line, this indicator will remain bearish. The indicator would trigger a new bullish signal if the MACD ends the trading week with a “meaningful” gap above the signal line. The indicator would trigger a new neutral signal if there was no “meaningful” separation between the MACD of IYY and the signal line at the end of the week.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +206, an increase from last week’s reading of +166. This indicator will remain bullish until July 22, 2016. If it does not trigger another confirming bullish signal before then, the signal will revert to neutral on that date. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading experiences a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger another confirming bullish signal and would reset the “stale date” six months forward. There is not peak-to-trough spread since the reading ended the week at its highest level for the last 10 trading days.
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 69.32, down from 79.32 a week ago. This is the lowest weekly close since February 26. Furthermore, the reading fell below the 75% bearish threshold, thereby triggering a new bearish signal. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above 75% and then fell back below it—the signal will go stale on revert to neutral on November 4. Furthermore, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 67.37, down from 69.94 a week ago. This indicator will remain bearish until October 28. If the indicator rises above 70% bearish threshold and then falls above it, this would trigger a confirming bearish signal. If there is not a confirming bearish signal before October 28, the signal will go “stale” and revert to neutral. If there is a confirming bearish signal before then, the “stale date” would be pushed forward six months. Alternatively, the indicator would trigger a new bullish signal by falling below the 30% bullish threshold and then falling below that level.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are both flashing bearish signals to end this week. As a result, this has triggered a new bearish signal. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, the $NASI moved below the moving average. This bearish crossover triggered a new bearish signal for this component indicator. $NASI ended the week at +304.69 versus the moving average at +388.51. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line once again ended the week below the signal line. Therefore, this component indicator remains bearish. The MACD of $NASI is +50.564 while the signal line is +89.576. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bearish as long as the two component indicators are flashing bearish signals. The indicator would trigger a new bullish signal if the two component indicators were flashing bullish signals. The indicator would trigger a new neutral signal if the two component indicators are flashing contradictory signals.
  • The AAII Investor Bullish Sentiment reading fell 5.0 percentage points this week to 22.3%. However, this indicator remains bullish. This week the bullish reading fell below the 25% bullish threshold. If and when the reading moves back above 25%, this would trigger a confirming bullish signal. If this does not happen before August 19, 2016, the current bullish signal will go stale and revert to neutral. If there is another confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.8

For the week ending May 6, 2016, three CI Market Dashboard indicators are bullish, two are neutral and four are bearish.

Start the Discussion!






5/6/2016

Author: Wayne A. Thorp, CFA
There will not be an update to the Market Dashboard the week ending May 13, 2016, while we attend the CFA Institute Annual Conference.

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) dipped 0.2% this week to close at 17,740.63. The index tested the 17,600 level, which had offered support in early April, so we look to that region for initial support.

The S&P 500 Index (SPX) shed 0.4% on a weekly basis to close at 2,057.14. This week the index tested its 50-day moving average (2,045.06), so we look to there for the first line of support. Below that are the recent intermediate lows around 2,040 and the 200-day moving average (2,012.98).

This week, four of the nine S&P Select Sector SPDR ETFs were up. Consumer Staples (XLP) led the way with a 1.8% gain. A renewed downturn in oil pushed the Energy (XLE) sector down 3.3%. Technology (XLX) eked out a 0.28% gain for the week.

The broad market Wilshire 5000 (W5000) finished the week down 0.55% at 21,258.08. This week the index tested its 50-day moving average (21,070.64), so we look there for initial downside support. The 200-day moving average is just below it at 20,906.28.

The tech-laden Nasdaq Composite (COMP) lost 0.8% to end the week at 4,736.16. The index fell through support around 4,750 but found its legs at round-number support at 4,700.

Small stocks were hit especially hard this week, as the Russell 2000 (RUT) index fell 1.4% to close at 1,114.72. This week the 200-day moving average failed to hold but the index found support at its 50-day moving average (1,102.93). Just below that is round-number support at 1,100.

The CBOE Volatility Index (VIX) shed 6.2% this week to close at 14.72.

Computerized Investing Market Dashboard Indicators

This week, two of the Market Dashboard indicators triggered new bearish signals (one from bullish and the other from neutral). However, none of Dashboard indicators triggered confirming bullish or bearish signals.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) fell 0.5% this week to close at $102.50. However, the ETF closed above its 100-day moving average so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $99.01, up from $98.97 at the end of last week. The spread between the IYY closing price and the moving average stands at +3.5%, down from +4.1% a week ago. As long as IYY ends the week above its 100-day simple moving average, the indicator is BULLISH. When IYY closes the week below its 100-day moving average, the indicator will trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • The MACD of IYY ended the week below its signal line, so this indicator remains bearish. The MACD of IYY stands at +0.272 while the signal line is at +0.652. As long as the MACD of IYY is below the signal line, this indicator will remain bearish. The indicator would trigger a new bullish signal if the MACD ends the trading week with a “meaningful” gap above the signal line. The indicator would trigger a new neutral signal if there was no “meaningful” separation between the MACD of IYY and the signal line at the end of the week.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +206, an increase from last week’s reading of +166. This indicator will remain bullish until July 22, 2016. If it does not trigger another confirming bullish signal before then, the signal will revert to neutral on that date. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading experiences a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger another confirming bullish signal and would reset the “stale date” six months forward. There is not peak-to-trough spread since the reading ended the week at its highest level for the last 10 trading days.
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 69.32, down from 79.32 a week ago. This is the lowest weekly close since February 26. Furthermore, the reading fell below the 75% bearish threshold, thereby triggering a new bearish signal. This indicator will remain bearish until November 4, 2016. If there has not been a confirming bearish signal before then—which would happen if the reading climbed above 75% and then fell back below it—the signal will go stale on revert to neutral on November 4. Furthermore, the indicator would trigger a new bullish signal if the reading were to fall below the 25% bullish threshold and then rise above it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 67.37, down from 69.94 a week ago. This indicator will remain bearish until October 28. If the indicator rises above 70% bearish threshold and then falls above it, this would trigger a confirming bearish signal. If there is not a confirming bearish signal before October 28, the signal will go “stale” and revert to neutral. If there is a confirming bearish signal before then, the “stale date” would be pushed forward six months. Alternatively, the indicator would trigger a new bullish signal by falling below the 30% bullish threshold and then falling below that level.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are both flashing bearish signals to end this week. As a result, this has triggered a new bearish signal. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, the $NASI moved below the moving average. This bearish crossover triggered a new bearish signal for this component indicator. $NASI ended the week at +304.69 versus the moving average at +388.51. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line once again ended the week below the signal line. Therefore, this component indicator remains bearish. The MACD of $NASI is +50.564 while the signal line is +89.576. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bearish as long as the two component indicators are flashing bearish signals. The indicator would trigger a new bullish signal if the two component indicators were flashing bullish signals. The indicator would trigger a new neutral signal if the two component indicators are flashing contradictory signals.
  • The AAII Investor Bullish Sentiment reading fell 5.0 percentage points this week to 22.3%. However, this indicator remains bullish. This week the bullish reading fell below the 25% bullish threshold. If and when the reading moves back above 25%, this would trigger a confirming bullish signal. If this does not happen before August 19, 2016, the current bullish signal will go stale and revert to neutral. If there is another confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.8

For the week ending May 6, 2016, three CI Market Dashboard indicators are bullish, two are neutral and four are bearish.

Start the Discussion!






4/29/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) lost 1.3% this week to close at 17,773.64. The index fell back below the 18,000 level so we look to the intermediate lows of late-March around 17,450 and 17,500 for initial support. For the month, the Dow picked up 0.5% for its third monthly win in a row.

The S&P 500 Index (SPX) dropped 1.2% this week to 2,065.30. Earlier this week, the 2,100 level once again was a roadblock to higher levels. To the downside, the first levels of support are the recent intermediate lows around 2,040. Below that is the 200-day moving average (2,014.52). For April, the S&P 500 advanced 0.3%.

This week, only three of the nine S&P Select Sector SPDR ETFs posted gains. Utilities (XLU) turned in solid gains in an otherwise drab week, adding 2.26%. The Technology sector (XLK) was the biggest loser, falling 3.02%. For the month, the Energy sector (XLE) benefited from a rebound in oil prices to climb 9.22%. Technology was also the laggard for the month, sliding 4.66%.

The broad market Wilshire 5000 (W5000) finished the week with a 1.1% loss to close at 21,377.59. The 21,750 level once again offered upside resistance earlier this week. To the downside, the 50- and 200-day moving averages have converged around the 20,930 mark, so we look to that level for initial support.

The tech-laden Nasdaq Composite (COMP) surrendered 2.7% to end the week at 4,775.36. The index fell through both its 50- and 200-day moving averages this week, so we look to the 4,750 level for initial support, as it did in late March.

The Russell 2000 (RUT) index fell 1.4% this week to close at 1,130.84. The 200-day moving average held this week, so we look to it for initial support. Below that, the 1,090 level may offer initial support, followed by the 50-day moving average (1,092.91).

The CBOE Volatility Index (VIX) gained 18.8% this week to 15.7. For the month, the “fear gauge” jumped 12.5%.

Computerized Investing Market Dashboard Indicators

This week, two of the Market Dashboard indicators triggered new bearish signals (one from neutral and one from bullish). However, none of Dashboard indicators triggered confirming bullish or bearish signals.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) fell 1.2% this week to close at $103.02. However, the ETF closed above its 100-day moving average so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $98.97, up slightly from last weeks’ reading of $98.94. The spread between the IYY closing price and the moving average stands at +4.1%, down from +5.4% a week ago. As long as IYY ends the week above its 100-day simple moving average, the indicator is BULLISH. When IYY closes the week below its 100-day moving average, the indicator will trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • The MACD of IYY ended the week below its signal line. As a result, this has triggered a new bearish signal. The MACD of IYY stands at +0.838 while the signal line is at +1.062. As long as the MACD of IYY is below the signal line, this indicator will remain bearish. The indicator would trigger a new bullish signal if the MACD ends the trading week with a “meaningful” gap above the signal line. The indicator would trigger a new neutral signal if there was no “meaningful” separation between the MACD of IYY and the signal line at the end of the week.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +166, up from +102 a week ago. This indicator will remain bullish until July 22, 2016. If it does not trigger another confirming bullish signal before then, the signal will revert to neutral on that date. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading experiences a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger another confirming bullish signal and would reset the “stale date” six months forward. Over the last 10 trading days, the indicator has seen a peak-to-trough spread of 154 (187 – 33).
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 79.32, down from, 86.21 a week ago. However, the indicator remains bullish. Furthermore, the indicator remained above the bearish threshold level of 75% at the end of the week. If and when the reading falls back below the 75% level, this would trigger a new bearish signal. If the reading does not fall below 75% before August 19, 2016, the current bullish signal will go “stale” and revert to neutral.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 69.94, up from 68.92 at the end of last week. For two days earlier this week, the indicator closed the day above the bearish threshold level of 70%. By ending the week below 70%, this indicator has triggered a new bearish signal. This indicator will remain bearish until October 28. If the indicator rises above 70% bearish threshold and then falls above it, this would trigger a confirming bearish signal. If there is not a confirming bearish signal before October 28, the signal will go “stale” and revert to neutral. If there is a confirming bearish signal before then, the “stale date” would be pushed forward six months. Alternatively, the indicator would trigger a new bullish signal by falling below the 30% bullish threshold and then falling below that level.
  • The AAII Investor Bullish Sentiment reading fell 6.0 percentage points this week to 27.4.4%. This indicator will remain bullish until August 19, 2016, unless it triggers a confirming bullish signal. This would happen if bullish sentiment fell below the 20% bullish threshold and then moved back above it. If this does not happen before that date, the signal will go “stale” on August 19 and revert to neutral. If there is another confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending April 29, 2016, four CI Market Dashboard indicators are bullish, three are neutral and two are bearish.

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4/22/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) added 0.6% this week to close at 18,003.75. This was the first time the index ended the week above 18,000 since July 16. It is too early to tell if round-number support exists at 18,000, so we continue to see initial support around 17,800, which was a resistance point earlier this month. Below that are the intermediate lows of late-March around 17,450 and 17,500.

The S&P 500 Index (SPX) ended the week 0.5% higher at 2,091.58. We will watch to see if the 2,100 level is a resistance point moving forward. To the downside, the first levels of support are the recent intermediate lows around 2,040. Below that is the 200-day moving average (2,014.02).

This week, five of the nine S&P Select Sector SPDR ETFs posted gains. The number of losing sectors for the week was the highest in months. The Energy sector (XLE) posted a rare weekly win, adding 5.51%. Utilities (XLU) were the biggest decliners this week, shedding 3.15%. For the week, the Technology (XLK) sector fell 2.03%.

The broad market Wilshire 5000 (W5000) finished the week with a 0.74% gain to close at 21,622.04. The 21,750 level may be offering up some near-term resistance to the upside. To the downside, we view the 200-day moving average (20,946.15) as offering initial downside support.

The tech-laden Nasdaq Composite (COMP) bucked the trend of most major indexes, slipping 0.6% to end the week at 4,906.23. The 4,950 level may offer some near-term resistance to the upside. To the downside, we look to the 200-day moving average (4,850.45) for initial support.

The Russell 2000 (RUT) index outperformed the broader indexes, posting a 1.4% gain to close at 1,146.69. The index made a bullish crossover above its 200-day moving average (1,129.39), which we look to for initial downside support. Below that, the 1,090 level may offer initial support, followed by the 50-day moving average (1,077.37).

The CBOE Volatility Index (VIX) dipped 2.9% this week to close at 13.22.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new neutral signal (from bearish). However, none of Dashboard indicators triggered confirming bullish or bearish signals.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) gained 0.56% this week to close at $104.28. Once again, the ETF closed above its 100-day moving average so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $98.94, an increase from $98.91 a week ago. The spread between the IYY closing price and the moving average stands at +5.4%, up from last week’s spread of +4.8%. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator will trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would trigger a neutral signal.
  • The MACD of IYY ended the week basically even with its signal line. As a result, this has triggered a new neutral signal. The MACD of IYY stands at +1.193 while the signal line is at +1.196. As long as there is no “meaningful” separation between the MACD of IYY and the signal line, this indicator will remain neutral. The indicator would trigger a new bullish signal if the MACD ends the trading week with a “meaningful” gap above the signal line. The indicator would trigger a new bearish signal if the MACD closed the week below the signal line.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +102, down from last week’s reading of +148. This indicator will remain bullish until July 22, 2016. If it does not trigger another confirming bullish signal before then, the signal will revert to neutral on that date. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading experiences a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger another confirming bullish signal and would reset the “stale date” six months forward. Over the last 10 trading days, the indicator has seen a peak-to-trough spread of 109 (187 – 78).
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 86.21, down from 88.71 a week ago. The indicator remains bullish. Furthermore, the indicator remained above the bearish threshold level of 75% at the end of the week. If and when the reading falls back below the 75% level, this would trigger a new bearish signal. If the reading does not fall below 75% before August 19, 2016, the current bullish signal will go “stale” and revert to neutral.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 68.92, up from 65.88 a week ago. This is the highest level since July 30, 2014. This indicator will remain bullish until August 19, 2016. If the indicator falls below the 30% bullish threshold and then rises above it, this would trigger a confirming bullish signal. If there is not a confirming bullish signal before August 19, the signal will go “stale” and revert to neutral. If there is a confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below that level.
  • The AAII Investor Bullish Sentiment reading climbed 5.6 percentage points this week to 33.4%. This indicator will remain bullish until August 19, 2016, unless it triggers a confirming bullish signal. This would happen if bullish sentiment fell below the 20% bullish threshold and then moved back above it. If this does not happen before that date, the signal will go “stale” on August 19 and revert to neutral. If there is another confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending April 22, 2016, five CI Market Dashboard indicators are bullish, four are neutral and none are bearish.

 

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4/15/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) posted a 1.8% gain this week to close at 17,897.46. To the downside, there may be some weak support around 17,800, which was a resistance point earlier this month. Below that there are the intermediate lows of late-March around 17,450 and 17,500.

The S&P 500 Index (SPX) tacked on 1.6% this week and closed at 2,080.73. To the downside, the first levels of support are the recent intermediate lows around 2,040. Below that is the 200-day moving average (2,014.02).

This week, all but one of the nine S&P Select Sector SPDR ETFs posted gains. Financials (XLF) was the big winner, gaining 3.85%. Consumer staples (XLP) was the sole loser, slipping 0.7%. For the week, the Technology (XLK) sector was up 1.03%.

The broad market Wilshire 5000 (W5000) finished the week at 21,463.54 after gaining 1.9%. The 200-day moving average once again offered downside support this week, so we still view it as the first line of support. There may be some near-term upside resistance around 21,500, which was the previous intermediate high prior to the sell-off at the end of 2015.

The tech-laden Nasdaq Composite (COMP) advanced 1.8% this week to 4,938.22. The index’s 200-day moving average provided downside support throughout the week, although the index did close below it earlier this week before rebounding above it. Below that, there may be support around 4,750.

The Russell 2000 (RUT) index of small stocks surged 3.1% this week to make a run at its 200-day moving average. It eventually fell just short, closing the week at 1,130.92 versus the moving average value of 1,132.02. To the downside, the 1,090 level may offer initial support, followed by 1,160 to 1,170 level.

The CBOE Volatility Index (VIX) slid 11.3% this week to 13.62.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new neutral signal (from bearish). However, none of Dashboard indicators triggered confirming bullish or bearish signals.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) added 1.8% this week to close at $103.70. Once again, the ETF closed above its 100-day moving average so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $98.91, an increase from last week’s $98.86. The spread between the IYY closing price and the moving average stands at +4.8%, up from +3.0% a week ago. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator will trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • The MACD of IYY once again ended the week at below its signal line. As a result, this indicator remains bearish. The MACD of IYY stands at +1.128 while the signal line is at +1.163. As long as the MACD of IYY is below the signal line, the indicator will remain bearish. The indicator would trigger a new bullish signal if the MACD ends the trading week with a “meaningful” gap above the signal line. The indicator would trigger a neutral signal if there was no gap between the MACD line and the signal line.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at $148, up from last week’s reading of +127. This indicator will remain bullish until July 22, 2016. If it does not trigger another confirming bullish signal before then, the signal will revert to neutral on that date. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading experiences a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger another confirming bullish signal and would reset the “stale date” six months forward. Over the last 10 trading days, the indicator has seen a peak-to-trough spread of 110 (172 – 62).
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 88.71, up from 81.99 at the end of last week. The indicator remains bullish. Furthermore, the indicator remained above the bearish threshold level of 75% at the end of the week. If and when the reading falls back below the 75% level, this would trigger a new bearish signal. If the reading does not fall below 75% before August 19, 2016, the current bullish signal will go “stale” and revert to neutral.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 65.88, up from last week’s reading of 63.29. This indicator will remain bullish until August 19. If the indicator falls below the 30% bullish threshold and then rises above it, this would trigger a confirming bullish signal. If there is not a confirming bullish signal before August 19, the signal will go “stale” and revert to neutral. If there is a confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below that level.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are flashing contradictory signals this week. Therefore, the indicator triggered a new neutral signal this week. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI crossed above the moving average and closed there at week’s end. This bullish crossover triggered a new bullish signal for this component indicator. $NASI ended the week at +388.73 versus the moving average at +360.64. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line once again ended the week below the signal line. Therefore, this component indicator remains bearish. The MACD of $NASI is +125.382 while the signal line is +155.474. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain neutral as long as the two component indicators are flashing contradictory signals. The indicator would trigger a new bullish signal if the two component indicators were flashing bullish signals. The indicator would trigger a new bearish signal if the two component indicators were flashing bearish signals.
  • The AAII Investor Bullish Sentiment reading fell 4.3 percentage points this week to 27.8%. This indicator will remain bullish until August 19, 2016, unless it triggers a confirming bullish signal. This would happen if bullish sentiment fell below the 20% bullish threshold and then moved back above it. If this does not happen before that date, the signal will go “stale” on August 19 and revert to neutral. If there is another confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending April 15, 2016, five CI Market Dashboard indicators are bullish, three are neutral and one is bearish.

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4/8/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) surrendered 1.2% this week and closed at 17,576.96. To the downside, there may be some weak support around 17,300, followed by the 200-day moving average (17,113.91).

The S&P 500 Index (SPX) dropped 1.2% to close the week at 2,047.60. To the downside, there is possible support around 2,040. Below that is the 200-day moving average (2,014.43) and round-number support at the 2,000 level.

This week, seven of the nine S&P Select Sector SPDR ETFs posted gains. Energy (XLE) was the big winner, gaining 2.15%. Health care (XLV) was the laggard, slipping 0.27%. For the week, Technology (XLK) broke even.

The broad market Wilshire 5000 (W5000) finished the week at 21,071.24, or down 1.2%. The 200-day moving average offered support throughout the week, so that is our initial support level to the downside. Just below that is round-number support at 21,000.

The tech-laden Nasdaq Composite (COMP) fell 1.3% this week to 4,850.69. The index’s 200-day moving average also provided downside support throughout the week. Below that, there may be support around 4,750.

The Russell 2000 (RUT) index of small stocks slid 1.8% this week to 1,097.31. To the downside, the 1,060-1,070 level may offer initial support, followed by the 50-day moving average (1,051.24).

The CBOE Volatility Index (VIX) jumped 17.3% this week to 15.36, its highest weekly close since March 11, according to Schaeffer’s Investment Research.

Computerized Investing Market Dashboard Indicators

This week, two of the Market Dashboard indicators triggered new bearish signals (both from neutral). However, none of Dashboard indicators triggered confirming bullish or bearish signals.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) fell 1.3% this week and closed at $101.82. However, the ETF again closed above its 100-day moving average so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $98.86, down from last week’s $98.91. The spread between the IYY closing price and the moving average stands at +3.0%, down from +4.28% a week ago. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator will trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • The MACD of IYY ended the week at below its signal line. As a result, this indicator has triggered a new bearish signal. The MACD of IYY stands at +1.119 while the signal line is at +1.334. As long as the MACD of IYY is below the signal line, the indicator will remain bearish. The indicator would trigger a new bullish signal if the MACD ends the trading week with a “meaningful” gap above the signal line. The indicator would trigger a neutral signal if there was no gap between the MACD line and the signal line.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +127, down from last week’s reading of +246. This indicator will remain bullish until July 22, 2016. If it does not trigger another confirming bullish signal before then, the signal will revert to neutral on that date. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading sees a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger another confirming bullish signal and would reset the “stale date” six months forward. Over the last 10 trading days, the indicator has seen a peak-to-trough spread of 151 (213 – 62).
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 81.99, down from last week’s reading of 88.3. The indicator remains bullish. However, the indicator remained above the bearish threshold level of 75% at the end of the week. If and when the reading falls back below the 75% level, this would trigger a new bearish signal. If the reading does not fall below 75% before August 19, 2016, the current bullish signal will go “stale” and revert to neutral.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 63.29, down from 64.87 at the end of last week. This indicator will remain bullish until August 19. If the indicator falls below the 30% bullish threshold and then rises above it, this would trigger a confirming bullish signal. If there is not a confirming bullish signal before August 19, the signal will go “stale” and revert to neutral. If there is a confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below that level.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are flashing bearish signals this week. Therefore, the indicator triggered a new bearish signal this week. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI crossed below the moving average and closed there at week’s end. This bearish crossover triggered a new bearish signal for this component indicator. $NASI ended the week at +326.65 versus the moving average at +342.11. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line once again ended the week below the signal line. Therefore, this component indicator remains bearish. The MACD of $NASI is +166.429 while the signal line is +198.054. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bearish as long as the two component indicators are flashing bearish signals. The indicator would trigger a new bullish signal if the two component indicators were flashing bullish signals. The indicator would trigger a new neutral signal if the two component indicators were flashing contradictory signals.
  • The AAII Investor Bullish Sentiment gained 5.0% this week to 32.2%. This indicator will remain bullish until August 19, 2016, unless it triggers a confirming bullish signal. This would happen if bullish sentiment fell below the 20% bullish threshold and then moved back above it. If this does not happen before that date, the signal will go “stale” on August 19 and revert to neutral. If there is another confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending April 8, 2016, five CI Market Dashboard indicators are bullish, two are neutral and two are bearish.

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4/1/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) set yet another year-to-date high to close the week. The blue-chip index gained 1.6% this week to close at 17,792.75. For the quarter ended March 31, the Dow finished 1.5% higher and climbed 7.1% for the month of March. The 17,800 level once again offered some resistance this week so any breakout to the upside on increased volume should be a bullish signal. To the downside, there may be some weak support around 17,200, followed by the 200-day moving average (17,124.69).

The S&P 500 Index (SPX) added 1.8% this week to close at 2,072.78. The large-cap index gained 6.6% in March and rose 0.8% for the quarter ended March 31. The index is nearing the levels of the last-2015 intermediate highs, so there may be some upside resistance. To the downside we look to the 200-day moving average (2,015.99) for initial support, followed by round-number support at the 2,000 mark.

This week, all but one of the S&P Select Sector SPDR ETFs posted gains. The sole loser this week was energy (XLE), which slipped 1.26%. Consumer staples (XLP) and technology (XLK) were the big winners, both adding 2.48%.

The broad market Wilshire 5000 (W5000) finished the week at 21,224.32, .80, up 1.48%. The index once again regained the ground above its 200-day moving average this week. The 200-day moving average has not provided much support, so we look to round-number support at 20,000.

The tech-laden Nasdaq Composite (COMP) was up nearly 3% this week to 4,914.54. The index gapped above its 200-day moving average on Wednesday, the first time the index closed above that moving average since December 31. However, it seems to have run into some resistance at the gap-down level from early January. There may be some weak support around 4,875, followed by the 4,750 level. The Nasdaq posted its first losing quarter since 2009, falling 2.8%. However, for March, the index recovered 6.8%.

The Russell 2000 (RUT) index of small stocks surged 3.5% this week to 1,117.68. There may be some upside resistance around 1,120. The index is still 2% below its 200-day moving average. To the downside, the 1,060-1,070 level may offer initial support, followed by the 50-day moving average (1,041.90).

The CBOE Volatility Index (VIX) closed the week at its lowest level since August 17, according to Schaeffer’s Investment Research. On the week, the “fear gauge” shed 11.1% to 13.10.

Computerized Investing Market Dashboard Indicators

This week, two of the Market Dashboard indicators triggered new neutral signals (both from bullish). However, none of Dashboard indicators triggered confirming bullish or bearish signals.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) posted a 2% gain this week, closing at $103.14. Once again, the ETF closed above its 100-day moving average so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $98.91 and the spread between the IYY closing price and the moving average stands at +4.28%. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator will trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • The MACD of IYY ended the week at roughly the same level as its signal line. As a result, this indicator has triggered a new neutral signal. The MACD of IYY stands at +1.513 while the signal line is at +1.473. The indicator will remain neutral as long as there is no “meaningful” gap between the MACD line and the signal line. The indicator would trigger a new bullish signal if the MACD ends the trading week above the signal line. If the MACD crosses below the signal line and remains there at week’s end, this would trigger a new bearish signal.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +246. This indicator will remain bullish until July 22, 2016. If it does not trigger another confirming bullish signal before then, the signal will revert to neutral on that date. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading sees a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger another confirming bullish signal and would reset the “stale date” six months forward. Over the last 10 trading days, the indicator has seen a peak-to-trough spread of zero (0) since the indicator ended the week at its highest level over the period.
  • The Percentage of NYSE Stocks Above 50-day Moving Average ended the week at 88.3. The indicator remains bullish. However, the indicator remained above the bearish threshold level of 75% at the end of the week. If and when the reading falls back below the 75% level, this would trigger a new bearish signal. If the reading does not fall below 75% before August 19, 2016, the current bullish signal will go “stale” and revert to neutral.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 64.87. This indicator will remain bullish until August 19. If the indicator falls below the 30% bullish threshold and then rises above it, this would trigger a confirming bullish signal. If there is not a confirming bullish signal before August 19, the signal will go “stale” and revert to neutral. If there is a confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below that level.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are flashing contradictory signals this week. Therefore, the indicator triggered a new neutral signal this week. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI once again closed above the moving average so this component indicator remains bullish. $NASI ended the week at +369.41 versus the moving average at +337.34. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD line crossed below the signal line and remained there at week’s end. This bearish crossover triggered a new bearish signal for this component indicator. The MACD of $NASI is +213.972 while the signal line is +228.364. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain neutral as long as the two component indicators are flashing contradictory signals. The indicator would trigger a new bullish signal if the two component indicators were flashing bullish signals. The indicator would trigger a new bearish signal if the two component indicators both flash bearish signals.
  • The AAII Investor Bullish Sentiment reading fell 6.6 percentage points this week to 27.2%. This indicator will remain bullish until August 19, 2016, unless it triggers a confirming bullish signal. This would happen if bullish sentiment fell below the 20% bullish threshold and then moved back above it. If this does not happen before that date, the signal will go “stale” on August 19 and revert to neutral. If there is another confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending April 1, 2016, five CI Market Dashboard indicators are bullish, four are neutral and none are bearish.

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3/18/2016

Author: Wayne A. Thorp, CFA

There will not be an update to the Market Dashboard next week due to the Good Friday holiday.

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) set another year-to-date high to close the week. The blue chip index gained 2.3% this week, its fifth consecutive weekly win, to close at 17,602.30. We are curious to see if any resistance forms around 17,800, the previous intermediate highs from late last year. To the downside, the 200-day moving average (17,136.36) is the first logical support level.

The S&P 500 Index (SPX) entered positive-year-to-date territory on Friday as the large-cap index climbed 2.3% this week to close at 2,049.56. To the downside we look to the 200-day moving average (2,017.86) for initial support, followed by round-number support at the 2,000 mark.

This week, all but one of the S&P Select Sector SPDR ETFs posted gains. The sole loser was Health Care (XLV), which dropped 2.2%. Industrials (XLI) were the big winner, adding 3.47%. The Technology sector (XLK) was up 2.19% this week.

The broad market Wilshire 5000 (W5000) finished the week at 21,096.80, up 1.41%. The index closed above its 200-day moving average on Friday, the first time it has done this since the beginning of December. If previous resistance around 20,700 does not turn into support, we will look for round-number support at 20,000.

The tech-laden Nasdaq Composite (COMP) added 1% for the week to 4,795.65. The index broke through resistance around 4,750 and we will wait to see if this turns into near-term support. The index is still 1.56% below its 200-day moving average.

The Russell 2000 (RUT) index of small stocks climbed 1.3% this week and closed at 1,101.67. Last week we wondered if the 1,100 level would offer any resistance, which does not seem to be the case. The index is still 4% below its 200-day moving average. To the downside, the 1,060-1,070 level may offer initial support, followed by the 50-day moving average.

The CBOE Volatility Index (VIX) closed Friday at its lowest level in seven weeks after dropping 15% to 14.02.

Computerized Investing Market Dashboard Indicators

This week, none of the Market Dashboard indicators triggered new signals. In addition, none of Dashboard indicators triggered confirming bullish or bearish signals.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) posted its fourth consecutive weekly gain, adding 1.34% this week to $102.27. The ETF closed above its 100-day moving average so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $99.55, down slightly from $99.57 a week ago. However, the spread between the IYY closing price and the moving average stands at +2.73%, up from +1.4% a week ago. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator will trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • The MACD of IYY once again closed the week above the signal line. As a result, this indicator remains bullish. The MACD of IYY stands at +1.57 while the signal line is at +1.269. The indicator will remain bullish as long as the MACD ends the trading week with a “meaningful” gap above the signal line. If the MACD crosses below the signal line and remains there at week’s end, this would trigger a new bearish signal. If the two lines are roughly equal with each other, this would trigger a neutral signal.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +252, up from +172 at the end of last week. This indicator will remain bullish until July 22, 2016. If it does not trigger another confirming bullish signal before then, the signal will revert to neutral on that date. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading sees a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger another confirming bullish signal and would reset the “stale date” six months forward. Over the last 10 trading days, the indicator has seen a peak-to-trough spread of zero (0) since the indicator ended the week at its highest level over the period.
  • The Percentage of NYSE Stocks Above 50-day Moving Average rose to 88.98 this week from 85.82 a week ago.  this week from 81.23 a week ago. The indicator remains bullish. However, the indicator remained above the bearish threshold level of 75% at the end of the week. If and when the reading falls back below the 75% level, this would trigger a new bearish signal. If the reading does not fall below 75% before August 19, 2016, the current bullish signal will go “stale” and revert to neutral.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 63.21, up from 59.36 a week ago.  This indicator will remain bullish until August 19. If the indicator falls below the 30% bullish threshold and then rises above it, this would trigger a confirming bullish signal. If there is not a confirming bullish signal before August 19, the signal will go “stale” and revert to neutral. If there is a confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below that level.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are once again flashing bullish signals this week. Therefore, the overall signal for this indicator is also bullish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI once again closed above the moving average so this component indicator remains bullish. $NASI ended the week at +252.31 versus the moving average at +181.85. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. Once again, the MACD line ended the week above the signal line, making this component indicator bullish. The MACD of $NASI is +252.598 while the signal line is +214.647. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bullish as long as the two component indicators are flashing bullish signals. The indicator will trigger a new bearish signal if the two component indicators both flash bearish signals. Alternatively, the indicator will trigger a new neutral signal if the two component indicators are flashing contradictory signals.
  • The AAII Investor Bullish Sentiment reading fell 7.4 percentage points this week to 30.0%. This indicator will remain bullish until August 19, 2016, unless it triggers a confirming bullish signal. This would happen if bullish sentiment fell below the 20% bullish threshold and then moved back above it. If this does not happen before that date, the signal will go “stale” on August 19 and revert to neutral. If there is another confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending March 18, 2016, seven CI Market Dashboard indicators are bullish, two are neutral and none are bearish.

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3/11/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) gained 1.2% this week to close at 17,213.31, its highest close of 2016. A week after pushing through its 50-day moving average, the blue-chip index ended Friday above its 200-day moving average for the first time since late December. In the near-term, the 17,000 mark is a logical support level.

The S&P 500 Index (SPX) added 1.1% this week and closed at 2,022.19, also a year-to-date high. The large-cap index was able to end the week above the key 2,000 level as well as its 200-day moving average. We will look to the 2,000 level for initial support.

For the second straight week, all nine of the S&P Select Sector SPDR ETFs posted weekly gains. The energy sector (XLE) again led the way with a 2.3% gain. Industrials (XLI) lagged the other sectors with a 0.48% gain. The technology sector (XLK) was up 1.06% this week.

The broad market Wilshire 5000 (W5000) finished the week at 20,802.97, up 0.94%. The index pushed through some near-term resistance around 20,700. We will wait to see if this level turns into near-term support.

The tech-laden Nasdaq Composite (COMP) finished the week 0.7% higher, closing at 4,748.47. The index seems to have run into some near-term resistance around 4,750, having tested it twice in the last two weeks and failing to cross above it. To the downside, there may be some weak support around 4,650, followed by the 50-day moving average.

The Russell 2000 (RUT) index of small stocks took a bit of a breather this week, tacking on 0.52% and ending the week at 1,087.56. We are curious to see if the 1,100 level offers any resistance to the upside. To the downside, the 50-day moving average is the first logical near-term support level.

The CBOE Volatility Index (VIX) ended the week with a 2.1% loss down to 16.5.

Computerized Investing Market Dashboard Indicators

This week, none of the Market Dashboard indicators triggered new signals. In addition, none of Dashboard indicators triggered confirming bullish or bearish signals.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) posted its third weekly win in a row, climbing 1.1% this week to close at $100.92. The ETF closed above its 100-day moving average so this indicator remains bullish. The 100-day moving average of IYY's closing price ended the week at $99.57, down from $99.63 a week ago. However, the spread between the IYY closing price and the moving average stands at +1.4%, up from last week’s +0.16%. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator will trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • The MACD of IYY closed the week above the signal line. As a result, this indicator remains bullish. The MACD of IYY stands at +1.254 while the signal line is at +0.876. The indicator will remain bullish as long as the MACD ends the trading week with a “meaningful” gap above the signal line. If the MACD crosses below the signal line and remains there at week’s end, this would trigger a new bearish signal. If the two lines are roughly equal with each other, this would trigger a neutral signal.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +172, up from +116 at the end of last week. This indicator will remain bullish until July 22, 2016. If it does not trigger another confirming bullish signal before then, the signal will revert to neutral on that date. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading sees a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger another confirming bullish signal and would reset the “stale date” six months forward. Over the last 10 trading days, the indicator has seen a peak-to-trough spread of zero (0) since the indicator ended the week at its highest level over the period.
  • The Percentage of NYSE Stocks Above 50-day Moving Average climbed to 85.82 this week from 81.23 a week ago. The indicator remains bullish. However, the indicator also remained above the bearish threshold level of 75% to end the week. If and when the reading falls back below the 75% level, this would trigger a new bearish signal. If the reading does not fall below 75% before August 19, 2016, the current bullish signal will go “stale” and revert to neutral.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 59.36, up from 56.01 a week ago. This indicator will remain bullish until August 19. If the indicator falls below the 30% bullish threshold and then rises above it, this would trigger a confirming bullish signal. If there is not a confirming bullish signal before August 19, the signal will go “stale” and revert to neutral. If there is a confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below that level.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are flashing bullish signals this week. Therefore, the overall signal for this indicator is also bullish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI once again closed above the moving average so this component indicator remains bullish. $NASI ended the week at +105.72 versus the moving average at -1.71. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. One again, the MACD line ended the week above the signal line, making this component indicator bullish. The MACD of $NASI is +222.963 while the signal line is +148.735. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bullish as long as the two component indicators are flashing bullish signals. The indicator will trigger a new bearish signal if the two component indicators both flash bearish signals. Alternatively, the indicator will trigger a new neutral signal if the two component indicators are flashing contradictory signals.
  • The AAII Investor Bullish Sentiment reading added 5.3 percentage points this week to 37.4%. This indicator will remain bullish until August 19, 2016, unless it triggers a confirming bullish signal. This would happen if bullish sentiment fell below the 20% bullish threshold and then moved back above it. If this does not happen before that date, the signal will go “stale” on August 19 and revert to neutral. If there is another confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending March 11, 2016, seven CI Market Dashboard indicators are bullish, two are neutral and none are bearish.

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3/4/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) tacked on 2.2% this week and closed at 17,006.77. The blue-chip index pushed through two key near-term resistance levels—its 50-day moving average and the 17,000 mark. We will have to wait and see if either of this levels turn into near-term support.

The S&P 500 Index (SPX) finished the week 2.6% higher and closed at 1,999.99. The large-cap index spent time above the 2,000 level this week but was not able to hold onto this key psychological barrier. It did move above the 50-day moving average this week. Whether that will turn into near-term support remains to be seen.

All nine of the S&P Select Sector SPDR ETFs ended the week with a gain. The energy sector (XLE) led the way by surging 6.52%. The health care sector (XLV) managed to scrape out a 0.16% win for the week. The technology sector (XLK) added 2.81% this week.

The broad market Wilshire 5000 (W5000) gained 3.1% this week, closing at 20,609.47. The index regained the territory above the 20,000 mark, a key psychological barrier. It also moved above its 50-day moving average. Whether round-number support materializes, or if the moving average holds, only time will tell.

The tech-laden Nasdaq Composite (COMP) finished the week 2.8% higher, closing at 4,717.02. The index moved north of its 50-day moving average and broke through resistance that had formed at January’s intermediate highs. To the downside, we will wait to see if the 50-day moving average offers support, or the 4,600 mark, which had been a near-term resistance level.

The Russell 2000 (RUT) index of small stocks posted another strong week, adding 4.3% to close at 1,081.93. This index moved above its 50-day moving average, but we will have to wait and see if this turns into near-term support.

The CBOE Volatility Index (VIX) surrendered 14.9% for its third consecutive weekly close, ending the week at 16.86.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new bullish signal, switching from bearish. However, none of Dashboard indicators triggered confirming bullish or bearish signals.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) added 2.9% this week to close at $99.79. The ETF closed about its 100-day moving average on Friday, the first time it has done this in 2016. By closing above the moving average, this indicator triggered a new bullish signal. The 100-day moving average of IYY's closing price ended the week at $99.63, down slightly from last week’s reading of $99.70. The spread between the IYY closing price and the moving average stands at +0.16%. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator will trigger a new bearish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • The MACD of IYY closed the week above the signal line. As a result, this indicator remains bullish. The MACD of IYY stands at +0.974 while the signal line is at +0.301. The indicator will remain bullish as long as the MACD ends the trading week with a “meaningful” gap above the signal line. If the MACD crosses below the signal line and remains there at week’s end, this would trigger a new bearish signal. If the two lines are roughly equal with each other, this would trigger a neutral signal.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +116, up from +10 at the end of last week. This indicator will remain bullish until July 22, 2016. If it does not trigger another confirming bullish signal before then, the signal will revert to neutral on that date. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading sees a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger another confirming bullish signal and would reset the “stale date” six months forward. Over the last 10 trading days, the indicator has seen a peak-to-trough spread of zero (0) since the indicator ended the week at its highest level over the period.
  • The Percentage of NYSE Stocks Above 50-day Moving Average rocketed to 81.23 from last week’s 55.25. This is the highest reading since July 1. The indicator remains bullish. However, the indicator moved above the bearish threshold level of 75%. If and when the reading falls back below the 75% level, this would trigger a new bearish signal. If the reading does not fall below 75% before August 19, 2016, the current bullish signal will go “stale” and revert to neutral.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 56.01, up sharply from last week’s reading of 44.81. This indicator will remain bullish until August 19. If the indicator falls below the 30% bullish threshold and then rises above it, this would trigger a confirming bullish signal. If there is not a confirming bullish signal before August 19, the signal will go “stale” and revert to neutral. If there is a confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below that level.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are flashing bullish signals this week. Therefore, the overall signal for this indicator is also bullish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI once again closed above the moving average so this component indicator remains bullish. $NASI ended the week at -172.41 versus the moving average at -326.28. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. One again, the MACD line ended the week above the signal line, making this component indicator bullish. The MACD of $NASI is +129.089 while the signal line is +46.774. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bullish as long as the two component indicators are flashing bullish signals. The indicator will trigger a new bearish signal if the two component indicators both flash bearish signals. Alternatively, the indicator will trigger a new neutral signal if the two component indicators are flashing contradictory signals.
  • The AAII Investor Bullish Sentiment reading ticked upward 0.8 percentage points this week to 32.0%. 1.2%. This indicator will remain bullish until August 19, 2016, unless it triggers a confirming bullish signal. This would happen if bullish sentiment fell below the 20% bullish threshold and then moved back above it. If this does not happen before that date, the signal will go “stale” on August 19 and revert to neutral. If there is another confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending March 4, 2016, seven CI Market Dashboard indicators are bullish, two are neutral and none are bearish.

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2/26/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) gained 1.5% this week and closed at 16,639.97. The blue-chip index pushed through near-term resistance around 16,500. We are still not convinced that there is meaningful support at the 16,000 level so we look to the August 2015 lows around 15,700 as the first line of downside support.

The S&P 500 Index (SPX) added 1.6% to close the week at 1,948.05. The index broke through resistance that had been forming around 1,940. The first level of meaningful support is near the lows of October 2014 around 1,820.

All but one of the S&P Select Sector SPDR ETFs posted gains this week. The sole exception was Utilities (XLU), which ticked downward 0.06%. Materials (XLB) led the way this week, adding 3.21%. Technology (XLK) climbed 1.48% for the week.

The broad market Wilshire 5000 (W5000) gained 1.9% this week, closing at 19,996.52. The index danced around the 20,000 mark on Thursday and Friday but did not have the steam to hold above that key psychological level. To the downside, the feel that the lows of February 2014 around 18,650 offer the first line of support.

The tech-laden Nasdaq Composite (COMP) was up 1.9% this week to 4,590.47. The index broke through near-term resistance around 4,550 and to the downside we look to the 4,200 level for the first line of meaningful support.

The Russell 2000 (RUT) index of small stocks also posted another strong week, climbing 2.7% to close at 1,037.18. We still do not place much faith in round-number support at 1,000, so we look to the lows of June 2013 at the 950 level for initial support.

The CBOE Volatility Index (VIX) ended the week 3.5% lower at 19.81.

Computerized Investing Market Dashboard Indicators

This week, none of the Market Dashboard indicators triggered new signals. In addition, none of Dashboard indicators triggered confirming signals.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) posted its second weekly gain in a row, adding 1.8% to close at $96.94. However, the ETF once again ended the week below its 100-day moving average, so this indicator remains bearish. The 100-day moving average of IYY's closing price ended the week at $99.70, ticking upward from last week’s $99.66 reading. The spread between the IYY closing price and the moving average stands at -2.77%, up from -4.4% a week ago. As long as IYY ends the week below its 100-day simple moving average, the indicator is bearish. When IYY closes the week above its 100-day moving average, the indicator will trigger a new bullish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • The MACD of IYY closed the week above the signal line. The MACD of IYY stands at +0.125 while the signal line is at -0.477. The indicator will remain bullish as long as the MACD ends the trading week with a “meaningful” gap above the signal line. If the MACD crosses below the signal line and remains there at week’s end, this would trigger a new bearish signal. If the two lines are roughly equal with each other, this would trigger a neutral signal.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +10, up from -88 at the end of last week. This indicator will remain bullish until July 22, 2016. If it does not trigger another confirming bullish signal before then, the signal will revert to neutral on that date. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading sees a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger another confirming bullish signal and would reset the “stale date” six months forward. Over the last 10 trading days, the indicator has seen a peak-to-trough spread of zero (0) since the indicator ended the week at its highest level over the period.
  • The Percentage of NYSE Stocks Above 50-day Moving Average jumped to 55.25 at the end of this week from 38.82 last week. This signal will remain bullish until August 19, 2016, unless the indicator triggers another confirming bullish signal by falling below the 25% bullish threshold and then moving back above it. If there is not another confirming bullish signal before that date, the signal will go “stale” and revert to neutral on August 19. If there is a confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, the indicator would trigger a new bearish signal if it moved above the 75% bearish threshold and then fell back below it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 44.81, up from last week’s reading of 36.59. This indicator will remain bullish until August 19. If the indicator falls below the 30% bullish threshold and then rises above it, this would trigger a confirming bullish signal. If there is not a confirming bullish signal before August 19, the signal will go “stale” and revert to neutral. If there is a confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below that level.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are flashing bullish signals this week. Therefore, the overall signal for this indicator is also bullish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI once again closed above the moving average so this component indicator remains bullish. $NASI ended the week at -552.37 versus the moving average at -663.43. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. One again, the MACD line ended the week above the signal line, making this component indicator bullish. The MACD of $NASI is +16.811 while the signal line is -46.871. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bullish as long as the two component indicators are flashing bullish signals. The indicator will trigger a new bearish signal if the two component indicators both flash bearish signals. Alternatively, the indicator will trigger a new neutral signal if the two component indicators are flashing contradictory signals.
  • The AAII Investor Bullish Sentiment reading rose 3.6 percentage points this week to 31.2%. This indicator will remain bullish until August 19, 2016, unless it triggers a confirming bullish signal. This would happen if bullish sentiment fell below the 20% bullish threshold and then moved back above it. If this does not happen before that date, the signal will go “stale” on August 19 and revert to neutral. If there is another confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending February 26, 2016, six CI Market Dashboard indicators are bullish, two are neutral and one is bearish.

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2/19/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) added 2.6% for the week and closed at 16,391.99. The blue-chip index regained ground above 16,000, but may have run into some short-term resistance around 16,500. Since round-number support failed to materialize before at 16,000, we look to the August 2015 lows around 15,700 as meaningful support.

The S&P 500 Index (SPX) gained 2.8% to close the week at 1,917.78. The first level of meaningful support is near the lows of October 2014 around 1,820.

For the first time in a few weeks, all nine of the S&P Select Sector SPDR ETFs posted gains. Cyclicals (XLY) surged 4.23% while Utilities (XLU) lagged with 1.4% gain for the week. Technology (XLK) also posted a strong week, climbing 3.54%.

The broad market Wilshire 5000 (W5000) lost 1.1% this week, closing at 19,026.84. Earlier in the week the index fell below round-number support at 19,000 to test the lows of February 2014 around 18,650.

The tech-laden Nasdaq Composite (COMP) jumped 3.8% this week and closed at 4,504.43. There may be some near-term resistance around 4,550 and to the downside, we look to the 4,200 level for the first line of meaningful support.

The Russell 2000 (RUT) index of small stocks also posted a strong week, adding 3.9% to close at 1,010.01. This was the first weekly close above 1,000 in three weeks. We do not place much faith in round-number support at 1,000, so we look to the lows of June 2013 at the 950 level for initial support.

The CBOE Volatility Index (VIX) surrendered 19.2% this week to close at 20.53.

Computerized Investing Market Dashboard Indicators

This week, two of the Market Dashboard indicators triggered new bullish signals (one switching from bearish and the other from neutral). In addition, three Dashboard indicators triggered confirming bullish signals.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) rebounded strongly this week, adding 3.3% to close at $95.27. However, the ETF once again ended the week below its 100-day moving average, so this indicator remains bearish. The 100-day moving average of IYY's closing price ended the week at $99.66, down from last week’s $99.73. The spread between the IYY closing price and the moving average stands at -4.4%, up from -7.5% a week ago. As long as IYY ends the week below its 100-day simple moving average, the indicator is bearish. When IYY closes the week above its 100-day moving average, the indicator will trigger a new bullish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • The MACD of IYY moved above the signal line this week and remained there at this week’s close. As a result of this bullish crossover, this indicator triggered a new bullish signal. The MACD of IYY stands at -0.714 while the signal line is at -1.222. The indicator will remain bullish as long as the MACD ends the trading week with a “meaningful” gap above the signal line. If the MACD crosses below the signal line and remains there at week’s end, this would trigger a new bearish signal. If the two lines are roughly equal with each other, this would trigger a neutral signal.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 38.82, up strongly from last week’s reading of 23.91. This week the indicator’s reading moved above the 25% bullish threshold, thereby triggering a confirming bullish signal. This signal will remain bullish until August 19, 2016, unless the indicator triggers another confirming bullish signal by falling below the 25% bullish threshold and then moving back above it. If there is not another confirming bullish signal before that date, the signal will go “stale” and revert to neutral on August 19. If there is a confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, the indicator would trigger a new bearish signal if it moved above the 75% bearish threshold and then fell back below it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 36.59, up from last week’s reading of 26.85. This week the indicator’s reading moved above the 30% bullish threshold, thereby triggering a confirming bullish signal. If the indicator does not trigger another confirming bullish signal—by falling below the 30% bullish threshold and then rising back above it—before August 19, 2016, the signal will go “stale” on that date and revert to neutral. If the indicator does trigger another confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below that level.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are flashing bullish signals this week. As such, the overall indicator triggered a new bullish signal this week. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI moved above the moving average and remained there at week’s end. This bullish crossover triggered a new bullish signal for this component indicator. $NASI ended the week at -833.01 versus the moving average at -900.94. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. One again, the MACD line ended the week above the signal line, so this component indicator remains bullish. The MACD of $NASI is -77.582 while the signal line is -114.359. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bullish as long as the two component indicators are flashing bullish signals. The indicator will trigger a new bearish signal if the two component indicators both flash bearish signals. Alternatively, the indicator will trigger a new neutral signal if the two component indicators are flashing contradictory signals.
  • The AAII Investor Bullish Sentiment reading climbed 8.3 percentage points this week to 27.6%. This week, the indicator’s reading climbed above the 20% bullish threshold, thereby triggering a new confirming bullish signal. This indicator will remain bullish until August 19, 2016, unless it triggers another confirming bullish signal. This would happen if bullish sentiment fell below the 20% bullish threshold and then moved back above it. If this does not happen before that date, the signal will go “stale” on August 19 and revert to neutral. If there is another confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending February 19, 2016, six CI Market Dashboard indicators are bullish, two are neutral and one is bearish.

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2/12/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) closed the week at 15,973.84 after posting a 1.4% loss. The blue-chip index fell through round-number support at 16,000. However, the August 2015 lows around 15,700 once again held, boosting their significance as meaningful support.

The S&P 500 Index (SPX) dropped 0.8% this week and closed at 1,864.78. The large-cap index fell below the January lows around 1,860 earlier in the week but rebounded to end the week just above that level. The next level of support are the lows of October 2014 around 1,820.

Only one of the nine S&P Select Sector SPDR ETFs posted gains this week: Consumer Staples (XLP) added 0.89%. Financials (XLF) fared the worst this week, losing 2.2%. Technology (XLK) lost 0.58% for the week.

The broad market Wilshire 5000 (W5000) lost 1.1% this week, closing at 19,026.84. Earlier in the week, the index fell below round-number support at 19,000 to test the lows of February 2014 around 18,650.

The tech-laden Nasdaq Composite (COMP) declined 0.6% to end the week at 4,337.51. The index fell through key support at the 4,350 level, so we now look to the 4,200 level for initial support.

The Russell 2000 (RUT) index of small stocks slid 1.4% this week to 971.99. We now look to the lows of June 2013 at the 950 level for initial support. The index tested this level and bounced back earlier this week.

The CBOE Volatility Index (VIX) gained 8.6% this week and closed at 24.50.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new bearish signal (switching from bullish), while another triggered a new neutral sign (switching from bullish). However, none of the indicators triggered new confirming bullish or bearish signals this week.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) fell 1.04% this week to close at $92.25. The ETF once again ended the week below its 100-day moving average, so this indicator remains bearish. The 100-day moving average of IYY's closing price ended the week at $99.73. The spread between the IYY closing price and the moving average stands at -7.5%, down from -6.88% a week ago. As long as IYY ends the week below its 100-day simple moving average, the indicator is bearish. When IYY closes the week above its 100-day moving average, the indicator will trigger a new bullish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • The MACD of IYY fell below the signal line this week. As a result of this bearish crossover, this indicator triggered a new bearish signal. The MACD of IYY stands at -1.626 while the signal line is at -1.582. The indicator will remain bearish as long as the MACD ends the trading week with a “meaningful” gap below the signal line. If the MACD crosses above the signal line and remains there at week’s end, this would trigger a new bullish signal. If the two lines are roughly equal with each other, this would trigger a neutral signal.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at -88, down from last week’s reading of -46. This indicator will remain bullish until July 22, 2016. If it does not trigger another confirming bullish signal before then, the signal will revert to neutral on that date. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading sees a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger another confirming bullish signal and would reset the “stale date” six months forward. Over the last 10 trading days, the indicator has seen a peak-to-trough spread of +50 to -672, falling just short of the 750-point decline at 722 points.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 23.91, down from 25.19 at the end of last week. However, this indicator remains bullish. This week, the reading fell below the 25% bullish threshold. If the reading does not rise back above 25% before July 29, 2016, thereby triggering a confirming bullish signal, the signal will go “stale” on that date. However, if the indicator does trigger a confirming bullish signal before then, the “stale date” would be pushed forward six months. Alternatively, the indicator would trigger a new bearish signal if it moved above the 75% bearish threshold and then fell back below it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 26.85, down from 32.12 a week ago. This indicator remains bullish. This week the indicator’s reading moved below the 30% bullish threshold. If the reading does not move back above 30%—triggering a confirming bullish signal—before August 5, 2016, the signal will go “stale” and revert to neutral. If the indicator triggers a confirming bullish signal before August 5, the stale date would be moved six months forward. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below that level.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are flashing contradictory signals this week. As such, the overall indicator triggered a new neutral signal this week. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. This week, $NASI moved below the moving average and remained there at week’s end. This bearish crossover triggered a new bearish signal for this component indicator. $NASI ended the week at -1,011.81 versus the moving average at -984.9. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. One again, the MACD line ended the week above the signal line, making this component indicator bullish. The MACD of $NASI is -23.602 while the signal line is -142.698. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain neutral as long as the two component indicators are flashing contradictory signals. The indicator will trigger a new bearish signal if the two component indicators both flash bearish signals. Alternatively, the indicator will trigger a new bullish signal if the two component indicators both flash bullish signals.
  • The AAII Investor Bullish Sentiment reading fell 8.3 percentage points this week to 19.2%. This is the second time in five weeks the reading has dipped below 20%. However, this indicator remains bullish. This week, the reading fell below the 20% bullish threshold. If the reading does not rise back above 20% before July 29, 2016, and thereby trigger a confirming bullish signal, the current signal will go “stale” and revert to neutral. If the indicator does trigger a confirming bullish signal before that date, the “stale date” would be moved forward six months. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending February 12, 2016, four CI Market Dashboard indicators are bullish, three are neutral and two are bearish.

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2/5/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) dropped 1.6% this week to close at 16,204.83. We continue to look to round-number support at 16,000. Below that are the lows of mid-August around 15,700.

The S&P 500 Index (SPX) lost 3.1% this week and closed at 1,880.02. The index fell through round-number support at 1,900 to rest at the lows of August and September. If the 1,880 level does not hold, then there is the area of the January lows around 1,860.

Three of the nine S&P Select Sector SPDR ETFs posted gains this week, with materials (XLB) surging to a 4.75% gain. Cyclicals (XLY) fell 5.33% on renewed worries of another Fed rate hike. Technology (XLK) was the second-weakest sector for the week, surrendering 4.22%.

The broad market Wilshire 5000 (W5000) slid 3.42% this week, closing at 19,244.94. We look to the 19,000 level as offering round-number support.

The tech-laden Nasdaq Composite (COMP) plunged 5.5% to end the week at 4,363.14. However, the 4,350 level did hold, reinforcing it as a key support level.

Small stocks were also hit hard this week, as the representative Russell 2000 (RUT) index shed 4.81% this week to 985.62. The index fell through key psychological support at 1,000. We have to look back to the lows of June 2013 at the 950 level for initial support.

The CBOE Volatility Index (VIX) added 15.7% this week and closed at 23.38.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new bullish signal (switching from neutral). In addition, one of the indicators triggered a new confirming bullish signal this week.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) dropped 3.02% this week and closed at $93.22. The ETF once again ended the week below its 100-day moving average, so this indicator remains bearish. The 100-day moving average of IYY's closing price ended the week at $100.11. The spread between the IYY closing price and the moving average stands at -6.88%, up from -4.1% a week ago. As long as IYY ends the week below its 100-day simple moving average, the indicator is BEARISH. When IYY closes the week above its 100-day moving average, the indicator will trigger a new bullish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • The MACD of IYY once again ended the week above its signal line, so this indicator remains bullish. The MACD of IYY stands at -1.291 while the signal line is at -1.572. The indicator will remain bullish as long as the MACD ends the trading week with a “meaningful” gap above the signal line. If the MACD crosses below the signal line and remains there at week’s end, this would trigger a new bearish signal. If the two lines are roughly equal with each other, this would trigger a neutral signal.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at -46, down from last Friday’s reading of +108. This indicator will remain bullish until July 22, 2016. If it does not trigger another confirming bullish signal before then, the signal will revert to neutral on that date. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading sees a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger another confirming bullish signal and would reset the “stale date” six months forward.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 25.19, down from 27.59 at the end of last week. This indicator will remain bullish until July 29, 2016. If there is not a new confirming bullish signal before then—the reading falls below the 25% bullish threshold and then moves back above 25%—the signal will go “stale” on that date and revert to neutral. If there is a confirming bullish before that date, the “stale date” will be pushed six months forward. Alternatively, the indicator would trigger a new bearish signal if it moved above the 75% bearish threshold and then fell back below it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 32.12, up from 29.3 a week ago. This week the indicator’s reading moved above the 30% bullish threshold, thereby triggering a confirming bullish signal. This indicator will remain bullish until August 5, 2016. If the indicator has not triggered another confirming bullish signal by falling below the 30% bullish threshold and then moving back above 30%, the signal will go “stale” and revert to zero. If the indicator triggers a confirming bullish signal before August 5, the stale date would be moved six months forward. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below that level.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are flashing bullish signals this week. As such, the overall indicator triggered a new bullish signal this week. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. $NASI once again ended the week above its moving average, making this component indicator bullish. $NASI ended the week at -905.36 versus the moving average at -918.09. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. Earlier this week, the MACD line moved above the signal line. This bullish crossover triggered a new bullish signal for this component indicator. The MACD of $NASI is -146.844, while the signal line is -171.53. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bullish as long as the two component indicators are flashing bullish signals. The indicator will trigger a new bearish signal if the two component indicators both flash bearish signals. If the component indicators are flashing contradictory signals, the overall signal would be neutral.
  • The AAII Investor Bullish Sentiment reading fell 2.21 percentage points this week to 27.55. This indicator will remain BULLISH until July 29, 2016. If the indicator does not trigger another confirming BULLISH signal—by bullishness falling back below 25% and then rising back above it—the signal will revert to neutral on that date. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending February 5, 2016, six CI Market Dashboard indicators are bullish, two are neutral and one is bearish.

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1/29/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) added 2.3% this week to close at 16,466.30. We look to round-number support at 16,000. Below that are the lows of mid-August around 15,700.

The S&P 500 Index (SPX) climbed 1.6% to end the week at 1,940.24. We look for possible round-number support at 1,900. Below that are the lows of August and September, which have offered support during previous downturns.

All but one of the S&P Select Sector SPDR ETFs posted gains this week, with energy (XLE) powering its way to a 4.43% gain. Healthcare (XLV) was the sole declining sector this week, losing 2.03%. Technology (XLK) was up 2.13% for the week.

The broad market Wilshire 5000 (W5000) gained 1.7% this week, closing at 19,926.00. We will wait to see if the 20,000 level offers any resistance while to the downside the 19,000 level offers initial support.

The tech-laden Nasdaq Composite (COMP) lagged the other major indexes, posting only a 0.3% gain this week to close at 4,613.95. We look to the 4,350 to 4,400 range for initial support.

Small stocks, as represented by the Russell 2000 (RUT), were up 1.4% this week as the index closed at 1,035.38. The 1,000 level should offer significant psychological support moving forward.

The CBOE Volatility Index (VIX) surrendered 9.6% this week and closed at 20.20.

Computerized Investing Market Dashboard Indicators

This week, one of the Market Dashboard indicators triggered a new bullish signal (switching from bearish), while another triggered a new neutral signal (switching from bearish). In addition, two of the indicators triggered confirming bullish signals this week.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) added 1.49% this week to close at $96.12. The ETF once again ended the week below its 100-day moving average, so this indicator remains bearish. The 100-day moving average of IYY's closing price ended the week at $100.27. The spread between the IYY closing price and the moving average stands at -4.1%, down from -5.7% a week ago. As long as IYY ends the week below its 100-day simple moving average, the indicator is bearish. When IYY closes the week above its 100-day moving average, the indicator will trigger a new bullish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • The MACD of IYY ended the week above its signal line, triggering a new bullish signal. The MACD of IYY stands at -1.783 while the signal line is at -2.032. The indicator will remain bullish as long as the MACD ends the trading week with a “meaningful” gap above the signal line. If the MACD crosses below the signal line and remains there at week’s end, this would trigger a new bearish signal. If the two lines are roughly equal with each other, this would trigger a neutral signal.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +108, up from last Friday’s reading of +18. This indicator will remain bullish until July 22, 2016. If it does not trigger another confirming bullish signal before then, the signal will revert to neutral. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading sees a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger another confirming bullish signal and would reset the “stale date” six months forward.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 27.59, up from last week’s reading of 16.19. At the end of this week, the indicator closed above the 25% bullish threshold, triggering a confirming bullish signal. The signal will remain bullish unless a new bearish signal is generated by the indicator climbing above the 75% bearish threshold and then falling back below it. If this does not occur, or if the indicator fails to generate another confirming bullish signal before July 29, the signal will go “stale” and revert to neutral.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 29.3, up from 25.43 a week ago. This indicator remains bullish. This week the indicator remained below the 30% bullish threshold. Once the reading rises back above 30%, this will trigger a confirming bullish signal. If the reading does not move above 30% before February 26, 2016, the signal will go stale and revert to neutral. However, the “stale date” will reset if the reading rises above 30% before that date. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are flashing contradictory signals this week. As such, the overall indicator triggered a new neutral signal this week. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. On Friday of this week, $NASI moved above the moving average, triggering a new bullish signal for this component indicator. $NASI ended the week at -965.64 versus the moving average at -973.97. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line ended the week below the signal line, making this component indicator bearish. The MACD of $NASI is -201.732 while the signal line is -186.12. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain neutral as long as the two component indicators are flashing contradictory signals. The indicator will trigger a new bullish signal if the two component indicators both flash bullish signals. If the component indicators are both flashing bearish signals, the overall signal would be bearish.
  • The AAII Investor Bullish Sentiment reading gained 8.23 percentage points this week to 29.75. This week, bullish sentiment rose above the 25% bullish threshold, thereby triggering a confirming bullish signal. This indicator will remain bullish for the next six months. If the indicator does not trigger another confirming bullish signal—by bullishness falling back below 25% and then rising back above it—the signal will revert to neutral on July 29. Alternatively, a new bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending January 29, 2016, five CI Market Dashboard indicators are bullish, three are neutral and one is bearish.

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1/22/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) climbed 0.7% this week, posting its first weekly gain of 2016 and closing at 16,093.51. The index reclaimed the ground above 16,000, so we look for round-number support there. Below that, the lows of mid-August around 15,700 are the next possible support area.

The S&P 500 Index (SPX) gained 1.4% this week and closed at 1,906.90. The index moved back above 1,900, so we look for possible round-number support there. Below that are the lows of August and September, which held during last week’s market selloff.

All but two of the S&P Select Sector SPDR ETFs posted gains this week, with Industrials (XLI), down 0.01%, and Financials (XLF) with a 0.65% loss, as the exceptions. Technology (XLK) was the biggest gainer this week, adding 2.64%.

The broad market Wilshire 5000 (W5000) added 1.33% to close the week at 19,592.34. The index fell through its lows of 2014 earlier this week, but the 19,000 level held. Therefore, we look there for initial support.

The tech-laden Nasdaq Composite (COMP) climbed 2.3% for the week, closing at 4,591.18. Earlier this week the index tested its August lows but bounced off of them. We look to this area—around 4,350 to 4,400—for initial support.

Small stocks, as represented by the Russell 2000 (RUT), rose 1.3% this week to 1,020.77. The index flirted with the 1,000 level earlier this week but, by and large, it held. This major psychological barrier should serve as initial support moving forward.

The CBOE Volatility Index (VIX) gave up 17.3% this week and closed at 22.34.

Computerized Investing Market Dashboard Indicators

This week, none of the Market Dashboard indicators triggered a new signal. However, one indicator triggered a confirming bullish signal.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) rebounded 1.35% this week to $94.71. However, the ETF once again ended the week below its 100-day moving average, so this indicator remains bearish. The 100-day moving average of IYY's closing price ended the week at $100.42. The spread between the IYY closing price and the moving average stands at -5.7%, up from last week’s -7.1%. As long as IYY ends the week below its 100-day simple moving average, the indicator is BEARISH. When IYY closes the week above its 100-day moving average, the indicator will trigger a new bullish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • The MACD of IYY closed below its signal line, so this indicator remains bearish. The MACD of IYY stands at -2.355 while the signal line is at -1.994. The indicator will remain bearish as long as the MACD ends the trading week with a “meaningful” gap below the signal line. If the MACD moves above the signal line and remains there at week’s end, this would trigger a new bullish signal. If the two lines are roughly equal with each other, this would trigger a neutral signal.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +18, up from -960 at the end of last week. The reading rebounded after seeing a 973-point decline over the 10-days ending last Friday so this indicator triggered a confirming bullish signal. This indicator will remain bullish for the next six months. If it does not trigger another confirming bullish signal before July 22, the signal will revert to neutral. If the reading falls back below the -750 level from positive territory and starts to recover, or if the reading sees a peak-to-trough decline of 750 points or more over a 10-trading-day period and then begins to rebound, this would trigger another confirming bullish signal and would reset the “stale date” six months forward.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 16.19, up from 11.69 a week ago. However, this indicator remains bullish. The indicator once again closed the week below the 25% bullish threshold. If and when the reading rises back above 25%, this will trigger a confirming bullish signal. However, if the reading does not rise above 25% before July 1, 2016, the bullish signal will go “stale” and revert to neutral. Alternatively, a new bearish signal would be generated if the indicator climbed above the 75% bearish threshold and then fell back below it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 25.43, down slightly from last week’s 25.8 reading. However, this indicator remains bullish. This week the indicator remained below the 30% bullish threshold. Once the reading rises back above 30%, this will trigger a confirming bullish signal. If the reading does not move above 30% before February 26, 2016, the signal will go stale and revert to neutral. However, the “stale date” will reset if the reading rises above 30% before that date. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are bearish this week. Therefore, the overall indicator remains bearish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. $NASI ended the week below the moving average, so this component indicator is bearish. $NASI ended the week at -975.95 versus the moving average at -894.48. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line ended the week below the signal line, making this component indicator bearish as well. The MACD of $NASI is -99.101 while the signal line is -55.291. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bearish as long as the two component indicators are also bearish. The indicator will trigger a new bullish signal if the two component indicators both flash bullish signals. If the component indicators are flashing contradictory signals, the overall signal would be neutral.
  • The AAII Investor Bullish Sentiment reading gained 3.62 percentage points this week to 21.52. This indicator remains bullish. Weekly bullish sentiment has been below the 25% bullish threshold for three straight weeks. If and when the reading rises back above 25%, this indicator will trigger a confirming bullish signal. If bullishness does not rise back above 25% before July 1, 2016, the signal will go “stale” and revert to neutral. A bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending January 22, 2016, four CI Market Dashboard indicators are bullish, two are neutral and three are bearish.

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1/8/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) lost 6.2% this week to 16,346.45, marking its worst New Year’s opening week since 1978, according to Schaeffer’s Investment Research. The index punched through support around 17,200 as well as round-number support at 17,000. The next support level would be the intermediate lows of September and October around 16,000.

The S&P 500 Index (SPX) finished the week with a 5.9% to 1,922.03, its worst opening week ever according to Schaeffer’s. Round-number support at 2,000 failed to materialize, and support at 1,980 also failed to hold. The next support level we see is around 1,880.

For the second week in a row, all nine of the S&P Select Sector SPDR ETFs were in the red. Materials (XLB) were hit especially hard, shedding 7.74%, followed closely by financials (XLF) down 7.26% and energy (XLE) off 7.08%. Utilities fared the best this week, losing only 0.39%. The technology (XLK) sector fell 6.4% for the week.

The broad market Wilshire 5000 (W5000) lost 6.14% this week and closed at 19,867.10. Round-number support at 21,000 and 20,000 failed to hold and the index neared the lows of August and September around 19,700.

The tech-laden Nasdaq Composite (COMP) plunged 7.3% for the week to 4,643.63. The index failed to find support at the 5,000 level, nor at 4,900, 4,800 or 4,700. The 4,500 level seems to be the next level of possible support.

Small stocks performed in a similar fashion to technology issues this week, as the Russell 2000 (RUT) fell 7.9% to close at 1,046.20. The index fell through the 1,080 level, which had held in September. We now look to the 1,050 level, which served as support back in October 2014.

The CBOE Volatility Index (VIX) jumped 48.3% this week to 27.01. This is the VIX’s highest close since September.

Computerized Investing Market Dashboard Indicators

This week, three of the Market Dashboard indicators triggered new bearish signals, all of which switching from bullish. However, no indicators triggered confirming bullish or bearish signals.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) dropped 6.1% from last week’s close to $95.71, below the 100-day moving average value of $100.88. This triggered a new bearish signal. The spread between the IYY closing price and the moving average stands at -5.12%. As long as IYY ends the week below its 100-day simple moving average, the indicator is bearish. When IYY closes the week above its 100-day moving average, the indicator will trigger a new bullish signal. If the weekly closing price of the ETF and its 100-day moving average are basically the same, the indicator would be neutral.
  • This week the MACD of IYY crossed below the trigger line, triggering a new bearish signal. The MACD of IYY stands at -1.203 while the signal line is at -0.561. The indicator will remain bearish as long as the MACD ends the trading week with a “meaningful” gap below the signal line. If the MACD moves above the signal line and remains there at week’s end, this would trigger a new bullish signal. If the two lines are roughly equal with each other, this would trigger a neutral signal.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at -525, down from +97 at the close of last week. This indicator will remain bullish until February 26, 2016, at which point the signal will go “stale” and revert to neutral. This “stale date” would be reset, however, if the indicator triggers a confirming bullish signal by falling below the -750 level and then climbing back above that level or by registering a 750-point peak-to-trough decline. Over the last 10 trading days, this indicator has registered a high +69 and a low of -525, for a peak-to-trough decline of 594 points.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 17.21, down sharply from 37.76 a week ago. However, this indicator remains bullish. This week the indicator fell below the 25% bullish threshold. If and when the reading rises back above 25%, this will trigger a confirming bullish signal. However, if the reading does not rise above 25% before July 1, 2016, the bullish signal will go “stale” and revert to neutral. Alternatively, a new bearish signal would be generated if the indicator climbed above the 75% bearish threshold and then fell back below it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 33.78, down from last week’s reading of 44.89. This indicator will remain bullish until it goes “stale” on February 26, 2016. At which point, the signal would revert to neutral. However, the “stale date” would be reset if the reading once again falls below the 30% bullish threshold and then rises above it, triggering a confirming bullish signal. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are bearish this week. This marks a change from last week and triggered a new bearish signal for the overall indicator. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. $NASI ended the week below the moving average, having crossed below it earlier in the week. This is why this component indicator is bearish. $NASI ended the week at -441.64 versus the moving average at -341.33. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line crossed below the signal line on Thursday at remained there at the close of this week, triggering a new bearish signal for this component indicator. The MACD of $NASI is -54.191 while the signal line is -39.513. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bearish as long as the two component indicators are bearish. The indicator will trigger a new bullish signal if the two component indicators both flash bullish signals. If the component indicators are flashing contradictory signals, the overall signal would be neutral.
  • The AAII Investor Bullish Sentiment reading fell 2.9 percentage points this week to 22.17%. This is its lowest reading in 23 weeks, dating back to July 30. However, this indicator remains bullish. Bullish sentiment fell below the 25% bullish threshold level for the second time in four weeks. If and when the reading rises back above 25%, this indicator will trigger a confirming bullish signal. If bullishness does not rise back above 25% before July 1, 2016, the signal will go “stale” and revert to neutral. A bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending January 8, 2016, four CI Market Dashboard indicators are bullish, three are bearish and two are neutral.

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1/1/2016

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) lost 0.72% during the holiday-shortened week and closed at 17,425.03. The index traded above and below its 50-day moving average this week before settling below it and the 200-day moving average. There is weak support possible around 17,200, followed by round-number support at 17,000. For December, the Dow gave back 1.7% and dropped 2.2% in 2015—its first year-over-year decline since 2008.

The S&P 500 Index (SPX) fell 0.83% this week and closed at 2.043.94. On Thursday, the index closed below its 200-day moving average. We see the 2,000 mark as initial support, followed by the 1,980 level. The index closed out December with a 1.7% loss and year-over-year it was down 0.7%.

All nine of the S&P Select Sector SPDR ETFs lost ground this week. Cyclicals (XLY) fared the best, slipping 0.41%, while energy (XLE) was the laggard, losing 2.03%. The technology (XLK) sector was off by 0.97% this week.

The broad market Wilshire 5000 (W5000) dropped 0.87% this week and closed at 21,167.86. After closing above its 50-day moving average on Tuesday, the index fell back below it on Thursday, also closing once again below the 200-day moving average. To the downside, the 20,800 level looks to offer initial support. Below this, we do not see meaningful support until the October lows around 19,700. For December, the index surrendered 2.26%, while year-over-year is fell 2.3%.

The tech-laden Nasdaq Composite (COMP) closed the week with a 0.81% loss at 5,007.41. After regaining the ground above the 50-day moving average, the index gapped down and closed below it on Thursday. Weak support levels exist at 5,000 and just below that is the 200-day moving average (4,982.21). The next line of support is around 4,900 and below that support appears to exist around 4,750. The index fell 2% in December but gained 5.7% in 2015.

Small stocks were hit especially hard this week, as the Russell 2000 (RUT) fell 1.63% to close the week at 1,135.89. The 50-day moving average (1,163.78) offered up some resistance earlier in the week. To the downside, we still see initial support around the 1,110 to 1,120 level.

The CBOE Volatility Index (VIX) jumped 15.7% this week to 18.21. For December the VIX gained 12.9%, but ended with a decline 5.2% for the year.

Computerized Investing Market Dashboard Indicators

This week, three of the Market Dashboard indicators triggered new bullish signals, all of them switching from bearish. In addition, two other indicators triggered bullish confirming signals.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) shed 1.1% this week to close at $101.97. The index ended the week above its 100-day moving average, so this indicator is now bullish. The 100-day moving average of IYY's closing price ended the week at $101.17. The spread between the IYY closing price and the moving average stands at +0.79%. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator will trigger a new bearish signal.
  • The MACD of IYY ended the week above its signal line. This indicator is now bullish. The MACD of IYY stands at -0.079 while the signal line is at -0.179. The indicator will remain bullish as long as the MACD ends the trading week with a “meaningful” gap above the signal line. If the MACD moves below the signal line and remains there at week’s end, this would trigger a new bearish signal. If the two lines are roughly equal with each other, this would trigger a neutral signal.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +97, up from +38 at the end of last week. This indicator will remain bullish until February 26, 2016, at which point the signal will go “stale” and revert to neutral. This “stale date” would be reset, however, if the indicator triggers a confirming bullish signal by falling below the -750 level and then climbing or by registering a 750-point peak-to-trough decline. Over the last 10 trading days, this indicator has registered a high of +6 and a low of -627, for a peak-to-trough decline of 633 points.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 37.76, down from last week’s reading of 39.75. However, this indicator remains bullish. Since the last update, the reading moved back above the 25% bullish threshold, triggering a confirming bullish signal. If the indicator does not trigger another confirming bullish signal, or trigger a new bearish signal, before July 1, 2016, the bullish signal will go “stale” and revert to neutral. A confirming bullish signal would be triggered by the reading falling below the 25% bullish threshold and then rising back above it. Alternatively, a new bearish signal would be generated if the indicator climbed above the 75% bearish threshold and then fell back below it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 44.89, down slightly from 44.473 a week ago. This indicator will remain bullish until it goes “stale” on February 26, 2016. At which point, the signal would revert to neutral. However, the “stale date” would be reset if the reading once again falls below the 30% bullish threshold and then rises above it. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are bullish this week. Therefore, the overall indicator is now bullish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. $NASI ended the week above the moving average, having crossed above it since the last update. This is why this component indicator is bullish. $NASI ended the week at -202.07 versus the moving average at -218.91. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line crossed above the signal line on Thursday of this week, triggering a new bullish signal for this component indicator. The MACD of $NASI is -32.822 while the signal line is -35.147. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bullish as long as the two component indicators are also bullish. The indicator will trigger a bearish signal if the two component indicators both flash bearish signals. If the component indicators are flashing contradictory signals, the overall signal would be neutral.
  • The AAII Investor Bullish Sentiment reading fell 1.31 percentage points this week to 25.07%.
  • Since the last update, the reading rose from above the 25% bullish threshold this week, thereby triggering a confirming bullish signal. If the indicator does not trigger another confirming bullish signal or a new bearish signal, this indicator will revert to neutral on July 1, 2016. A bearish signal would be triggered if the reading rose above the 50% bearish threshold and then fell below it.

For the week ending January 1, 2016, seven CI Market Dashboard indicators are bullish, none are bearish and two are neutral.

 

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12/18/2015

Author: Wayne A. Thorp, CFA

Weekly Market Summary

Please note there will not be an update to the Stock Market Dashboard next week in observance of Christmas. Happy Holidays!

The Dow Jones Industrial Average (DJIA) fell 0.8% for the week to close at 17,128.45. The index tested support around 17,200, ending the week below the level that had held in mid-November. If the index continues its downward trek, the next support level would be the 17,000 mark.

The S&P 500 Index (SPX) lost 0.3% for the week and closed at 2,005.52. Round-number support at 2,000 held this week, although the index did break below it on an intraday level. We see the 2,000 as initial support, followed by the 1,980 level.

Only two of the nine S&P Select Sector SPDR ETFs posted gains this week, with utilities (XLU) leading the way by adding 1.65%.The materials (XLB) sector fared the worst, surrendering 3.78% this week. The technology (XLK) sector was off by 1.51% this week.

The broad market Wilshire 5000 (W5000) lost 0.33% this week and closed at 20,754.76. Earlier in the week, the 50-day moving average was a resistance point. To the downside, the 20,800 level once again held as support, albeit barely. Below this, we do not see meaningful support until the October lows around 19,700.

The tech-laden Nasdaq Composite (COMP) slid 0.2% before closing the week at 4,923.08. Earlier in the week, the index managed to reclaim ground above both the 50- and 200-day moving averages, but failed to hold that ground by the end of the week. The index gapped down on Friday, testing support around 4,900. If the 4,900 level does not hold, the next support level appears to be around 4,750.

Small stocks moved in line with the larger indexes this week, a change from recent history. The Russell 2000 (RUT) dipped 0.23% to close the week at 1,120.97. The 1,150 level offered up some resistance earlier in the week. To the downside, we still see initial support around the 1,105 to 1,100 level.

The CBOE Volatility Index (VIX) dropped 15.1% this week to 20.70.

Computerized Investing Market Dashboard Indicators

This week, none of the Market Dashboard indicators switched signals. However, there was one confirming bullish signal.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) fell 0.22% this week to close at $100.70. The index once again ended the week below its 100-day moving average, so this indicator is bearish for the second week in a row. The 100-day moving average of IYY's closing price ended the week at $101.84. The spread between the IYY closing price and the moving average stands at -1.12%, which is wider than last week’s -1.04% gap. As long as IYY ends the week below its 100-day simple moving average, the indicator is bearish. When IYY closes the week above its 100-day moving average, the indicator will trigger a new bullish signal.
  • The MACD of IYY ended the week below its signal line, so this indicator remains bearish. The MACD of IYY stands at -0.474, while the signal line is at -0.176. The indicator will remain bearish as long as the MACD ends the trading week with a “meaningful” gap below the signal line. If the MACD moves above the signal line and remains there at week’s end, this would trigger a new bullish signal. If the two lines are roughly equal with each other, this would trigger a neutral signal.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at -145, up from last week’s reading of -295. This indicator will remain bullish until February 26, 2016, at which point the signal will go “stale” and revert to neutral. This “stale date” would be reset, however, if the indicator triggers a confirming bullish signal by falling below the -750 level and then climbing or by registering a 750-point peak-to-trough decline. Over the last 10 trading days, this indicator has registered a high of +6 and a low of -627, for a peak-to-trough decline of 633 points.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 23.05, up from last week’s reading of 21.05. This indicator remains bullish. During the week, the reading moved back above the 25% bullish threshold. While it did not end the week above the 25% level, this intra-week move triggered a confirming bullish signal. If and when the reading once again moves above the 25% level, the indicator will trigger another confirming bullish signal. If the indicator does not move back above 25% by June 17, 2016, the current bullish signal will go stale and will revert to neutral. If the reading rises above 25% before then, the confirming bullish signal would reset the stale date six months forward. Alternatively, a new bearish signal would be generated if the indicator climbed above the 75% bearish threshold and then fell back below it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 43.61, down from 46.21 a week ago. This indicator will remain bullish until it goes “stale” on February 26, 2016. At which point, the signal would revert to neutral. However, the “stale date” would be reset if the reading once again falls below the 30% bullish threshold and then rises above it. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are bearish this week. Therefore, the overall indicator remains bearish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. $NASI ended the week below the moving average, which is why this component indicator is bearish. $NASI ended the week at -308.09 versus the moving average at -253.54. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line ended the week below the signal line, which is why this component indicator is bearish. The MACD of $NASI is -37.873 while the signal line is +1.53. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bearish as long as the two component indicators are bearish. The indicator will trigger a bullish signal if the two component indicators both flash bullish signals. If the component indicators are flashing contradictory signals, the overall signal would be neutral.
  • The AAII Investor Bullish Sentiment reading fell 4.64 percentage points this week to 23.87%. This is the lowest reading in 20 weeks. However, this indicator remains bullish. The indicator did fall below the 25% bullish threshold this week. When the reading rises back above the 25% mark, it will trigger a confirming bullish signal for this indicator. If the reading does not rise back above 25% before February 12, 2016, this signal would go “stale” and revert to neutral on that date. If there is a confirming bullish signal before then, the “stale date” would be reset six months forward.

For the week ending December 18, 2015, four CI Market Dashboard indicators are bullish, three are bearish and two are neutral.

 

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12/18/2015

Author: Wayne A. Thorp, CFA

Weekly Market Summary

Please note there will not be an update to the Stock Market Dashboard the weekend of December 25 in observance of Christmas. Happy Holidays!

The Dow Jones Industrial Average (DJIA) fell 0.8% for the week to close at 17,128.45. The index tested support around 17,200, ending the week below the level that had held in mid-November. If the index continues its downward trek, the next support level would be the 17,000 mark.

The S&P 500 Index (SPX) lost 0.3% for the week and closed at 2,005.52. Round-number support at 2,000 held this week, although the index did break below it on an intraday level. We see the 2,000 as initial support, followed by the 1,980 level.

Only two of the nine S&P Select Sector SPDR ETFs posted gains this week, with utilities (XLU) leading the way by adding 1.65%.The materials (XLB) sector fared the worst, surrendering 3.78% this week. The technology (XLK) sector was off by 1.51% this week.

The broad market Wilshire 5000 (W5000) lost 0.33% this week and closed at 20,754.76. Earlier in the week, the 50-day moving average was a resistance point. To the downside, the 20,800 level once again held as support, albeit barely. Below this, we do not see meaningful support until the October lows around 19,700.

The tech-laden Nasdaq Composite (COMP) slid 0.2% before closing the week at 4,923.08. Earlier in the week, the index managed to reclaim ground above both the 50- and 200-day moving averages, but failed to hold that ground by the end of the week. The index gapped down on Friday, testing support around 4,900. If the 4,900 level does not hold, the next support level appears to be around 4,750.

Small stocks moved in line with the larger indexes this week, a change from recent history. The Russell 2000 (RUT) dipped 0.23% to close the week at 1,120.97. The 1,150 level offered up some resistance earlier in the week. To the downside, we still see initial support around the 1,105 to 1,100 level.

The CBOE Volatility Index (VIX) dropped 15.1% this week to 20.70.

Computerized Investing Market Dashboard Indicators

This week, none of the Market Dashboard indicators switched signals. However, there was one confirming bullish signal.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) fell 0.22% this week to close at $100.70. The index once again ended the week below its 100-day moving average, so this indicator is bearish for the second week in a row. The 100-day moving average of IYY's closing price ended the week at $101.84. The spread between the IYY closing price and the moving average stands at -1.12%, which is wider than last week’s -1.04% gap. As long as IYY ends the week below its 100-day simple moving average, the indicator is bearish. When IYY closes the week above its 100-day moving average, the indicator will trigger a new bullish signal.
  • The MACD of IYY ended the week below its signal line, so this indicator remains bearish. The MACD of IYY stands at -0.474, while the signal line is at -0.176. The indicator will remain bearish as long as the MACD ends the trading week with a “meaningful” gap below the signal line. If the MACD moves above the signal line and remains there at week’s end, this would trigger a new bullish signal. If the two lines are roughly equal with each other, this would trigger a neutral signal.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at -145, up from last week’s reading of -295. This indicator will remain bullish until February 26, 2016, at which point the signal will go “stale” and revert to neutral. This “stale date” would be reset, however, if the indicator triggers a confirming bullish signal by falling below the -750 level and then climbing or by registering a 750-point peak-to-trough decline. Over the last 10 trading days, this indicator has registered a high of +6 and a low of -627, for a peak-to-trough decline of 633 points.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 23.05, up from last week’s reading of 21.05. This indicator remains bullish. During the week, the reading moved back above the 25% bullish threshold. While it did not end the week above the 25% level, this intra-week move triggered a confirming bullish signal. If and when the reading once again moves above the 25% level, the indicator will trigger another confirming bullish signal. If the indicator does not move back above 25% by June 17, 2016, the current bullish signal will go stale and will revert to neutral. If the reading rises above 25% before then, the confirming bullish signal would reset the stale date six months forward. Alternatively, a new bearish signal would be generated if the indicator climbed above the 75% bearish threshold and then fell back below it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 43.61, down from 46.21 a week ago. This indicator will remain bullish until it goes “stale” on February 26, 2016. At which point, the signal would revert to neutral. However, the “stale date” would be reset if the reading once again falls below the 30% bullish threshold and then rises above it. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are bearish this week. Therefore, the overall indicator remains bearish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. $NASI ended the week below the moving average, which is why this component indicator is bearish. $NASI ended the week at -308.09 versus the moving average at -253.54. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line ended the week below the signal line, which is why this component indicator is bearish. The MACD of $NASI is -37.873 while the signal line is +1.53. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bearish as long as the two component indicators are bearish. The indicator will trigger a bullish signal if the two component indicators both flash bullish signals. If the component indicators are flashing contradictory signals, the overall signal would be neutral.
  • The AAII Investor Bullish Sentiment reading fell 4.64 percentage points this week to 23.87%. This is the lowest reading in 20 weeks. However, this indicator remains bullish. The indicator did fall below the 25% bullish threshold this week. When the reading rises back above the 25% mark, it will trigger a confirming bullish signal for this indicator. If the reading does not rise back above 25% before February 12, 2016, this signal would go “stale” and revert to neutral on that date. If there is a confirming bullish signal before then, the “stale date” would be reset six months forward.

For the week ending December 18, 2015, four CI Market Dashboard indicators are bullish, three are bearish and two are neutral.

 

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12/11/2015

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) lost 3.3% this week to close at 17,265.21. The index once again fell below its 200-day and 50-day moving averages, although unlike last week there was no rebound back above them. The index did seem to find support around the 17,200 level, which offered support in mid-November.

The S&P 500 Index (SPX) surrendered 3.8% for the week and closed at 2,012.37, its worst week since August. The index moved decisively down through its 200-day and 50-day moving averages this week and broke through support around 2,020. The next support level is at the round-number mark of 2,000.

All nine of the S&P Select Sector SPDR ETFs ended the week in the red. Utilities (XLU) fared the best, giving up “only” 1.6%. The energy sector (XLE) plummeted 6.55% after oil prices hit new seven-year lows. The technology (XLK) sector was down 3.97% this week.

The broad market Wilshire 5000 (W5000) dropped 3.94% this week and closed at 20,823.36. The 50-day moving average failed to provide support this week, as the index moved sharply through it. The index did seem to settle around the 20,800 level.

The tech-laden Nasdaq Composite (COMP) lost 4.1% this week to close at 4,933.47, closing below round-number support at 5,000 for the first time in more than three weeks. The index also gapped below its 50-day and 200-day moving averages on Friday. The next support level appears to be around the 4,900 mark.

Small stocks lagged larger-cap stocks again this week, as the Russell 2000 (RUT) slid 5.05% to 1,123.61. The move broke through support at the 1,165 to 1,170 level as well as the 50-day moving average. The next support level appears to be around the 1,105 to 1,100 level.

The CBOE Volatility Index (VIX) jumped 64.7% this week to close at 24.39, its highest close since late September.

Computerized Investing Market Dashboard Indicators

This week, two of the Market Dashboard indicators switched to bearish from bullish. However, there were no confirming bullish or bearish signals this week.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) fell 3.71% this week to close at $100.92. On Friday the ETF closed below its 100-day moving average, triggering a new bearish signal. The 100-day moving average of IYY's closing price ended the week at $101.98. The spread between the IYY closing price and the moving average stands at -1.04%. As long as IYY ends the week below its 100-day simple moving average, the indicator is bearish. When IYY closes the week above its 100-day moving average, the indicator will trigger a new bullish signal.
  • The MACD of IYY ended the week below its signal line, so this indicator remains bearish. The MACD of IYY stands at -0.194, while the signal line is at +0.223. The indicator will remain bearish as long as the MACD ends the trading week with a “meaningful” gap below the signal line. If the MACD moves above the signal line and remains there at week’s end, this would trigger a new bullish signal. If the two lines are roughly equal with each other, this would trigger a neutral signal.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at -295. This indicator will remain bullish until February 26, 2016, at which point the signal will go “stale” and revert to neutral. This “stale date” would be reset, however, if the indicator triggers a confirming bullish signal by registering a 750-point drop from a positive reading, or by registering another 750-point peak-to-trough decline.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 21.05. This indicator remains bullish. The reading fell below the 25% bullish threshold on Friday, which means when the reading moves back above 25%, this indicator will generate a confirming bullish signal. If the indicator does not move back above 25% by April 1, 2016, the current bullish signal will go stale and will revert to neutral. If the reading rises above 25% before then, the confirming bullish signal would reset the stale date for six months. Alternatively, a new bearish signal would be generated if the indicator climbed above the 75% bearish threshold and then fell back below it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 46.21, down from last week’s reading of 53.413. This indicator will remain bullish until it goes “stale” on February 26, 2016. At which point, the signal would revert to neutral. However, the “stale date” would be reset if the reading once again falls below the 30% bullish threshold and then rises above it. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are bearish this week. Therefore, there has been a change in signal for the overall indicator to bearish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. The $NASI crossed below the moving average this week and this bearish crossover triggered a new bearish signal for this component indicator. $NASI ended the week at -154.88 versus the moving average at -77.89. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line crossed the signal line to the downside this week and remained there at week’s end. This bearish crossover triggered a bearish signal for this component indicator. The MACD of $NASI is +25.907, while the signal line is +46.378. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bearish as long as the two component indicators are bearish. The indicator will trigger a bullish signal if the two component indicators both flash bullish signals. If the component indicators are flashing contradictory signals, the overall signal would be neutral.
  • The AAII Investor Bullish Sentiment reading fell 0.99 percentage points this week to 28.51%. This is the lowest reading in 10 weeks. This indicator will remain bullish until a new bearish signal is triggered by bullish sentiment rising above the 50% bearish threshold and then falling back below it. Alternatively, the indicator would trigger a confirming bullish signal if the bullishness reading fell below the 25% bullish threshold and then rose back above it. If no new confirming bullish signals are triggered, or if the indicator does not trigger a new bearish signal before February 12, 2016, this signal would go “stale” and revert to neutral on that date.

For the week ending December 11, 2016, four CI Market Dashboard indicators are bullish, three are bearish and two are neutral.

 

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12/4/2015

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) added 0.3% this week to close at 17,847.63. Upside resistance seems to be building around 17,900. Earlier this week, the index closed below its 200-day moving average but reclaimed territory above it on Friday. As a result, we see near-term support around the 17,400 level, followed closely by the 50-day moving average, which is currently at 17,361.59.

The S&P 500 Index (SPX) gained 0.1% for the week and closed at 2,091.69. The index has been running into resistance in the 2,090 to 2,150 range over the last couple of weeks. The index also violated its 200-day moving average this week but closed the week back above it. We look to the 50-day moving average (2,041.98) followed by the 2,020 level for support.

Only four of the nine S&P Select Sector SPDR ETFs were up this week. Technology (XLK) led the way with a 1.5% gain. The energy sector (XLE) was down sharply—falling 4.53%—after OPEC failed to agree to cut production to support oil prices, opting instead to maintain market share.

The broad market Wilshire 5000 (W5000) fell 0.38% this week and closed at 21,678.17. The 200-day moving average continues to be a barrier to the upside for the index. To the downside, the 50-day moving average once again held this week and it currently stands at 21,391.08. Below that is round-number support around 21,000.

The tech-laden Nasdaq Composite (COMP) added 0.7% this week to close at 5,142.27. The 5,150 level continues to be a resistance point. To the downside, there is round-number support at the 5,000 level, and just below that is the 200-day moving average (4,974.95).

Small stocks lagged larger-cap stocks this week, as the Russell 2000 (RUT) dropped 1.58% to 1,183.40. The 1,200 level has become a resistance point while the 1,165 to 1,170 level appears to offer initial downside support. Below that is the 200-day moving average at 1,213.57.

The CBOE Volatility Index (VIX) lost 2.1% this week to close at 14.81.

Computerized Investing Market Dashboard Indicators

This week, following the Thanksgiving holiday break, one of the Market Dashboard indicators switched to bullish from bearish. However, there were no confirming bullish or bearish signals this week.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) dipped 0.11% this week to close at $104.81. This indicator remains bullish since the ETF closed the week above its 100-day moving average. The 100-day moving average of IYY's closing price ended the week at $102.16. The spread between the IYY closing price and the moving average stands at 2.59%. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish.
  • The MACD of IYY ended the week below its signal line. The MACD of IYY stands at +0.426 while the signal line is at +0.553. The indicator will remain bearish as long as the MACD ends the trading week with a “meaningful” gap below the signal line. 
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at -125. This indicator will remain bullish until February 26, 2016, at which point the signal will go “stale” and revert to neutral. This “stale date” would be reset, however, if the indicator triggers a confirming bullish signal by registering a 750-point drop from a positive reading, or by registering another 750-point peak-to-trough decline.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 52.98. This indicator will remain bullish until it goes stale on April 1, 2016, and reverts to neutral. This assumes, however, that there are not any additional confirming bullish signals, which would be triggered by the indicator falling below the 25% level and then rising back above it. Alternatively, a new bearish signal would be generated if the indicator climbed above the 75% bearish threshold and then fell back below it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 53.41. This indicator will remain bullish until it goes “stale” on February 26, 2016. At which point, the signal would revert to neutral. However, the “stale date” would be reset if the reading once again falls below the 30% bullish threshold and then rises above it. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are BULLISH this week. Therefore, the overall indicator is now bullish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. The $NASI was above the moving average at the end of this week, making this component indicator bullish. $NASI ended the week at +40.63 versus the moving average at +21.95. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line crossed the signal line to the upside this week and remained there at week’s end. This bullish crossover triggered a BULLISH signal for this component indicator. The MACD of $NASI is +60.886 while the signal line is +56.182. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bullish as long as the two component indicators are bullish.
  • The AAII Investor Bullish Sentiment reading fell 2.87 percentage points this week to 29.49%. This indicator will remain bullish until a new bearish signal is triggered by bullish sentiment rising above the 50% bearish threshold and then falling back below it. The indicator would trigger a confirming bullish signal if the bullishness reading fell below the 25% bullish threshold and then rose back above it. If no new confirming bullish signals are triggered, or if the indicator does not trigger a new bearish signal before February 12, 2016, this signal would go “stale” and revert to neutral on that date.

For the week ending December 4, six CI Market Dashboard indicators are bullish, one is bearish and two are neutral.

 

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11/27/2015

Author: CI Staff

There will not be a CI Market Dashboard update the weekend of November 27 in observance of the Thanksgiving holiday. From the entire staff at Computerized Investing, we wish you a happy and safe Thanksgiving!

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11/20/2015

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) gained 3.4% to post its best week since early October. The index closes the week at 17,823.81. We continue to see resistance at the 18,000 level. To the downside, the 200-day moving average currently stands at 17,588.99. Below that, we see support around the 17,200 level, followed by the 50-day moving average, which is currently at 17,125.82.

The S&P 500 Index (SPX) tacked on 3.2% this week, its best since December of last year. Initial support may exist around the 200-day moving average (2,064.85), followed by the 2,020 mark, which is also equivalent to the 50-day moving average (2,019.91).

All nine S&P Select Sector SPDR ETFs were up this week. Cyclicals (XLY) posted a strong gain of 4.5% for the week. The energy sector (XLE) was the weakest, but still posted a 1.39% gain. Technology (XLK) was the second-strongest sector this week with its 4.32% advance.

The broad market Wilshire 5000 (W5000) gained 3.03% this week and closed at 21,681.31. The index ran into resistance at its 200-day moving average (21,761.62). To the downside, the index bounced off the 50-day moving average, which currently stands at 21,124.73. Below that is round-number support at 21,000.

The tech-laden Nasdaq Composite (COMP) climbed 3.6% this week to 5,104.92, its best five-day stretch since July according to Schaeffer’s Investment Research. The index was able to break through round-number resistance at 5,100, but it is too soon to tell if that will turn into support moving forward. To the downside, there is round-number support at the 5,000 level, and just below that is the 200-day moving average (4,963.63).

Small stocks lagged larger-cap stocks this week, as the Russell 2000 (RUT) posted “only” a 2.49% gain to 1,175.15. The index seems to have found support around the 1,140 to 1,145 level.

The CBOE Volatility Index (VIX) dropped roughly 23% this week to 15.47.

Computerized Investing Market Dashboard Indicators

Following our two-week break, two of the Market Dashboard indicators switched to bearish from bullish. However, there were no confirming bullish or bearish signals this week.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) added 3.21% this week to close at $104.69. This indicator remains bullish since the ETF closed the week above its 100-day moving average. The 100-day moving average of IYY's closing price ended the week at $102.16. The spread between the IYY closing price and the moving average stands at 2.48%. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator will trigger a new bearish signal.
  • The MACD of IYY ended the week below its signal line, so this indicator is now bearish. The MACD of IYY stands at +0.556, while the signal line is at +0.707. The indicator will remain bearish as long as the MACD ends the trading week with a “meaningful” gap below the signal line. If the MACD crosses above the signal line and remains there at week’s end, this would trigger a new bullish signal. If the two lines are roughly equal with each other, this would trigger a neutral signal.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at -4. This indicator will remain bullish until February 26, 2016, at which point the signal will go “stale” and revert to neutral. This “stale date” would be reset, however, if the indicator triggers a confirming bullish signal by registering a 750-point drop from a positive reading, or by registering another 750-point peak-to-trough decline.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 56.33. This indicator will remain bullish until it goes stale on April 1, 2016, and reverts to neutral. This assumes, however, that there are not any additional confirming bullish signals, which would be triggered by the indicator falling below the 25% level and then rising back above it. Alternatively, a new bearish signal would be generated if the indicator climbed above the 75% bearish threshold and then fell back below it.
  • The NYSE Bullish Percentage Index ($BPNYA) ended this week at 52.73. This indicator will remain bullish until it goes “stale” on February 26, 2016. At which point, the signal would revert to neutral. However, the “stale date” would be reset if the reading once again falls below the 30% bullish threshold and then rises above it. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator are bearish this week. Therefore, the overall indicator is also bearish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. The $NASI was below the moving average at the end of this week, making this component indicator bearish. $NASI ended the week at -144.44 versus the moving average at -129.73. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line ended this week below the signal line, so this component indicator is also bearish. The MACD of $NASI is +47.295 while the signal line is +76.812. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bearish as long as the two component indicators are bearish. The indicator will trigger a bullish signal if the two component indicators both flash bullish signals. If the component indicators are flashing contradictory signals, the overall signal would be neutral.
  • The AAII Investor Bullish Sentiment slid 3.53 percentage points this week to 30.74%. This indicator will remain bullish until a new bearish signal is triggered by bullish sentiment rising above the 50% bearish threshold and then falling back below it. The indicator would trigger a confirming bullish signal if the bullishness reading fell below the 25% bullish threshold and then rose back above it. If no new confirming bullish signals are triggered, or if the indicator does not trigger a new bearish signal before February 12, 2016, this signal would go “stale” and revert to neutral on that date.

For the week ending November 20, five CI Market Dashboard indicators are bullish, two are bearish and two are neutral.

 

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11/14/2015

Author: CI Staff

There will not be a CI Market Dashboard Update for the week ended November 13, 2015. The next update will come after the market close on November 20.

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11/6/2015

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) gained 1.4% this week to close at 17,910.33, marking its sixth straight weekly advance.  The index ran into resistance at the 18,000 level, so we will see how long it takes for it to push through that round-number level. To the downside, the 200-day moving average appears to offer initial support around 17,580.

The S&P 500 Index (SPX) added 1% this week to 2,099.20, also posting its sixth weekly gain in a row. We look to the 200-day moving average, currently around 2,060, for initial support.  

All but two of the nine S&P Select Sector SPDR ETFs were up this week. Financials (XLF) outpaced all other sectors with a 2.7% on anticipation of the Fed raising short-term interest rates in December. Utilities (XLU), which would lose some of their luster if rates did increase, were the biggest loser: -3.43%. The technology sector (XLK) climbed 1.58% this week.

The broad market Wilshire 5000 (W5000) was up 1% this week and closed at 21,865.24. The index ran into resistance at the 22,000 level. To the downside, the 200-day moving average (21,760.69) appears to offer support.

The tech-laden Nasdaq Composite (COMP) gained 1.8% this week to 5.147.12. The index pushed through resistance at the 5,100 level, but ran into resistance around 5,100, which matched the intermediate highs of July, The index ran into some resistance around the 5,150. To the downside, we see the 5,000 level offering initial support, followed by its 200-day moving average around 4,950.

Small stocks broker out of their recent slump, as the Russell 2000 (RUT) surged 3.26% to close at 1,199.75. The index seemed to have run into resistance at the 1,200 level. To the downside, the 1,160 level appears to offer initial support

The CBOE Volatility Index (VIX) slipped 4.9% this week to 14.33.

Computerized Investing Market Dashboard Indicators

This week, no Market Dashboard indicators triggered any new signals. In addition, there were no confirming bullish or bearish signals this week.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) added 1.01% this week to close at $105.21, so the indicator remains bullish. The 100-day moving average of IYY's closing price held steady this week at $102.34. The gap between the closing price of the Total Market Shares ETF and its 100-day simple moving average widened to 2.8% this week from last week’s +1.78%. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator will trigger a new bearish signal.
  • The MACD of IYY once again ended the week once again above its signal line. Therefore, this indicator remains bullish. The MACD of IYY stands at +1.468, while the signal line is at +1.334. The indicator will remain bullish as long as the MACD ends the trading week with a “meaningful” gap above the signal line. If the MACD crosses below the signal line and remains there at week’s end, this would trigger a new bearish signal. If the two lines are roughly equal with each other, this would trigger a neutral signal.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at -8, down from +66 as of last week’s close. However, this indicator remains bullish. This indicator will remain bullish until February 26, 2016, at which point the signal will go “stale” and revert to neutral. This “stale date” would be reset, however, if the indicator triggers a confirming bullish signal by registering a 750-point drop from a positive reading, or by registering another 750-point peak-to-trough decline.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 65.74, down from 66.92 a week ago. The indicator flirted with the 75% bearish threshold earlier this week, notching its highest intra-week reading since July 2014. However, this indicator remains bullish for the sixth straight week. This indicator will remain bullish until it goes stale on April 1, 2016, and reverts to neutral. This assumes, however, that there are not any additional confirming bullish signals, which would be triggered by the indicator falling below the 25% level and then rising back above it. Alternatively, a new bearish signal would be generated if the indicator climbed above the 75% bearish threshold and then fell back below it.
  • The NYSE Bullish Percentage Index ($BPNYA) rose to 55.94 this week, up from 53.34 a week ago. This indicator will remain bullish until it goes “stale” on February 26, 2016. At which point, the signal would revert to neutral. However, the “stale date” would only be reset if the reading once again falls below the 30% bullish threshold and then rises above it. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator remained bullish this week. Therefore, the overall indicator is also bullish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. The $NASI was above the moving average at the end of this week, making this component indicator bullish. $NASI ended the week at +2.65, versus the moving average at -44.33. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line ended this week above the signal line, so this component indicator is also bullish. The MACD of $NASI is +116.302, while the signal line is +109.643. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bullish as long as the two component indicators are bullish. The indicator will trigger a bearish signal if the two component indicators both flash bearish signals. If the component indicators are flashing contradictory signals, the overall signal would be neutral.
  • The AAII Investor Bullish Sentiment dipped 1.39% this week to 39%. However, this indicator will remain bullish until a new bearish signal is triggered by bullish sentiment rising above the 50% bearish threshold and then falling back below it. The indicator would trigger a confirming bullish signal if the bullishness reading fell below the 25% bullish threshold and then rose back above it. If no new confirming bullish signals are triggered, or if the indicator does not trigger a new bearish signal before February 12, 2016, this signal would go “stale” and revert to neutral on that date.

For the week ending November 6, seven CI Market Dashboard indicators are bullish and two are neutral.

 

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10/31/2015

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) added 0.1% this week for its fifth straight weekly win to close the month of October at 17,663.54. For the month, the index gained 8.5%, its largest monthly gain in nearly four years according to Schaeffer’s Investment Research.  The index tested its 200-day moving average earlier in the week, but the trendline held. Therefore, we look to the 200-day moving average, currently at 17,577.88, as the initial support level. The 17,800 level also appears to be offering some upside resistance, as it did in August.

The S&P 500 Index (SPX) gained 0.2% this week to 2,079.36, also posting its fifth weekly gain in a row. For the month, the index posted an 8.3% gain. The index also tested its 200-day moving average this week and bounced off of it. Therefore, we see the trendline, currently at 2,061.59, as initial support to the downside.

Only three of the nine S&P Select Sector SPDR ETFs were up this week. Increasing odds that the Federal Reserve will increase short-term interest rates in December made Utilities (XLU) less attractive, pushing the sector down 1.88%. The Health Care sector (XLV) rebounded from its recent weakness on merger news this week, gaining 2.9%. The technology sector (XLK) slipped 0.41% this week.

The broad market Wilshire 5000 (W5000) edged upward 0.16% this week and closed at 21,648.51. The index ran into resistance at its 200-day moving average, which is currently at 21,748.95. In the near-term, we view the 21,400 level as possibly offering support, followed by the 21,300 level.

The tech-laden Nasdaq Composite (COMP) climbed 0.4% this week to 5,053.75, ending October with a 9.4% gain. The index ran into some resistance around the 5,100 level this week. To the downside, we see the 5,000 level offering initial support, followed by its 200-day moving average around 4,935.

Small stocks did not fare as well as this week as larger stocks, as the Russell 2000 (RUT) lost 0.36% and closed at 1,161.86. Once again, the index flirted with its 50-day moving average, so we are gaining confidence in it as an initial support level. To the upside, the 1,180 level appears to be offering some resistance.

The CBOE Volatility Index (VIX) added 4.2% this week to 15.07. For the month, the VIX surrendered 38.5%.

Computerized Investing Market Dashboard Indicators

This week, one Market Dashboard indicator triggered a new bullish signal, from bearish. However, there were no confirming bullish or bearish signals this week.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) added 0.26% this week to close at $104.16. This indicator remains bullish since the ETF closed the week above its 100-day moving average. The 100-day moving average of IYY's closing price fell to $102.34 from $102.39 a week ago. The spread between the IYY closing price and the moving average widened to +1.78% this week from last week’s +1.46%. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator will trigger a new bearish signal.
  • The MACD of IYY once again ended the week once again above its signal line. Therefore, this indicator remains bullish. The MACD of IYY stands at +1.323, while the signal line is at +1.04. The indicator will remain bullish as long as the MACD ends the trading week with a “meaningful” gap above the signal line. If the MACD crosses below the signal line and remains there at week’s end, this would trigger a new bearish signal. If the two lines are roughly equal with each other, this would trigger a neutral signal.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +66, down slightly from +71 as of last week’s close. This indicator will remain bullish until February 26, 2016, at which point the signal will go “stale” and revert to neutral. This “stale date” would be reset, however, if the indicator triggers a confirming bullish signal by registering a 750-point drop from a positive reading, or by registering another 750-point peak-to-trough decline.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 66.92, down from a week ago. This indicator will remain bullish until it goes stale on April 1, 2016, and reverts to neutral. This assumes, however, that there are not any additional confirming bullish signals, which would be triggered by the indicator falling below the 25% level and then rising back above it. Alternatively, a new bearish signal would be generated if the indicator climbed above the 75% bearish threshold and then fell back below it.
  • The NYSE Bullish Percentage Index ($BPNYA) rose to 53.34 this week, up from 50.59 a week ago. This indicator will remain bullish until it goes “stale” on February 26, 2016. At which point, the signal would revert to neutral. However, the “stale date” would only be reset if the reading once again falls below the 30% bullish threshold and then rises above it. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator remained bullish this week. Therefore, the overall indicator is also bullish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. The $NASI was above the moving average at the end of this week, making this component indicator bullish. $NASI ended the week at -29.81, versus the moving average at -142.45. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line ended this week above the signal line, so this component indicator is also bullish. The MACD of $NASI is +110.48, while the signal line is +101.778. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bullish as long as the two component indicators are bullish. The indicator will trigger a bearish signal if the two component indicators both flash bearish signals. If the component indicators are flashing contradictory signals, the overall signal would be neutral.
  • The AAII Investor Bullish Sentiment climbed 5.63 percentage points this week to 40.39%. This indicator will remain bullish until a new bearish signal is triggered by bullish sentiment rising above the 50% bearish threshold and then falling back below it. The indicator would trigger a confirming bullish signal if the bullishness reading fell below the 25% bullish threshold and then rose back above it. If no new confirming bullish signals are triggered, or if the indicator does not trigger a new bearish signal before February 12, 2016, this signal would go “stale” and revert to neutral on that date.

For the week ending October 30, seven CI Market Dashboard indicators are bullish and two are neutral.

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10/23/2015

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) advanced 2.5% this week to close at 17,646.70, its highest level since July 21. According to Schaeffer’s Investment Research, the index closed above its 10- and 20-week trendlines for just the second time since May. In addition, the index moved above its 200-day moving average on Friday for the first time since mid-July. Whether the 200-day moving average will offer any support remains to be seen. So we look to the 17,200 level for initial support.

The S&P 500 Index (SPX) gained 2.1% this week to 2,075.15. The index moved into positive territory for the year as well. It, too, moved above its 200-day moving average; this for the first time since August. Again, we do not place much faith on the 200-day moving average for support, so we instead look to the 2,020 level for initial support

Only three of the nine S&P Select Sector SPDR ETFs were down this week. Slumping oil prices continued to weigh on the energy sector (XLE), which fell 1.43% this week. The technology sector (XLK) rallied 4.36% this week, outpacing all other sectors

The broad market Wilshire 5000 (W5000) climbed 1.57% this week and closed at 21,614.06. The index is now within 0.6% of its 200-day moving average. In the near-term, we view the 21,000 level and the 50-day moving average (20,822.12) as support levels.

The tech-laden Nasdaq Composite (COMP) surged 3% this week to 5,031.86, marking its first close above 5,000 since August 19. The index pushed decisively above the 200-day moving average on Friday, forming a significant gap. Initial support should be around the fill-point of that gap, which is around 4,925.

Small stocks were relatively muted this week, as the Russell 2000 (RUT) rose 0.32% to 1,166.06. The index flirted with its 50-day moving average much of the week, so we are gaining confidence in it as an initial support level.

The CBOE Volatility Index (VIX) surrendered 3.9% this week to 14.46, extending its weekly losing streak to four.

Computerized Investing Market Dashboard Indicators

This week, one Market Dashboard indicator triggered a new bullish signal, from bearish. However, there were no confirming bullish or bearish signals this week.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) climbed 1.76% this week to close at $103.89. On Thursday, the ETF closed above its 100-day moving average and remained there at week’s end. This triggered a new bullish signal. The 100-day moving average of IYY's closing price fell to $102.39 from $102.57 a week ago. The spread between the IYY closing price and the moving average turned positive this week to +1.46% from last week’s -0.47%. As long as IYY ends the week above its 100-day simple moving average, the indicator is bullish. When IYY closes the week below its 100-day moving average, the indicator will trigger a new bearish signal.
  • The MACD of IYY ended the week once again above its signal line. Therefore, this indicator remains bullish. The MACD of IYY stands at +1.003, while the signal line is at +0.615. The indicator will remain bullish as long as the MACD ends the trading week with a “meaningful” gap above the signal line. If the MACD crosses below the signal line and remains there at week’s end, this would trigger a new bearish signal. If the two lines are roughly equal with each other, this would trigger a neutral signal.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +161, up from +109 as of last week’s close. This indicator will remain bullish until February 26, 2016, at which point the signal will go “stale” and revert to neutral. This “stale date” would be reset, however, if the indicator triggers a confirming bullish signal by registering a 750-point drop from a positive reading, or by registering another 750-point peak-to-trough decline.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 68.14, up from 65.78 a week ago. This indicator will remain bullish until it goes stale on April 1, 2016, and reverts to neutral. This assumes, however, that there are not any additional confirming bullish signals, which would be triggered by the indicator falling below the 25% level and then rising back above it. Alternatively, a new bearish signal would be generated if the indicator climbed above the 75% bearish threshold and then fell back below it.
  • The NYSE Bullish Percentage Index ($BPNYA) rose to 50.59 this week from 46.75 a week ago. This indicator will remain bullish until it goes “stale” on February 26, 2016. At which point, the signal would revert to neutral. However, the “stale date” would be reset if the reading once again falls below the 30% bullish threshold and then rises above it. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator remained bullish this week. Therefore, the overall indicator is also bullish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. The $NASI was above the moving average at the end of this week, making this component indicator bullish. $NASI ended the week at -159.95, versus the moving average at -203.67. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line ended this week above the signal line, so this component indicator is also bullish. The MACD of $NASI is +107.041, while the signal line is +24.627. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bullish as long as the two component indicators are bullish. The indicator will trigger a bearish signal if the two component indicators both flash bearish signals. If the component indicators are flashing contradictory signals, the overall signal would be neutral.
  • The AAII Investor Bullish Sentiment edged upward by 0.68 percentage points this week to 34.77%. This indicator will remain bullish until a new bearish signal is triggered by bullish sentiment rising above the 50% bearish threshold and then falling back below it. The indicator would trigger a confirming bullish signal if the bullishness reading fell below the 25% bullish threshold and then rose back above it. If no new confirming bullish signals are triggered, or if the indicator does not trigger a new bearish signal before February 12, 2016, this signal would go “stale” and revert to neutral on that date.

For the week ending October 23, seven CI Market Dashboard indicators are bullish and two are neutral.

 

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10/16/2015

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) added 0.8% this is week to close at 17,215.97. We will look to the 50-day moving average for near-term support around 16,680.

The S&P 500 Index (SPX) advanced 0.9% this week to 2,033.11. To the downside, we believe the 2,000 mark carries significant psychological support. Just below that is the 50-day moving average, which is currently 1,984.67.

Seven of the nine S&P Select Sector SPDR ETFs posted a gain this week. The industrials sector (XLI) dipped 1.55%, while the materials sector (XLB) ticked downward by 0.18%. Weak economic data lowered the probability of a Fed interest rate hike this year, which sent the utilities sector (XLU) higher by 2.26%. The technology sector (XLK) added 1.23% for the week.

The broad market Wilshire 5000 (W5000) rose 0.58% this week to close at 21,280.38. In the near-term, we view the 21,000 level and the 50-day moving average (20,884.72) as support levels.

The tech-laden Nasdaq Composite (COMP) climbed 1.2% this week to 4,886.69. To the upside, we see the 4,900 level as being a bit of a speedbump, possibly followed by the 200-day moving average (4,919.35). As far as support goes, the 50-day moving average (4,807.79) may offer the first line of support. Below that, we continue to look to the 4,550 level for more meaningful support.

Small stocks ended the week down, as the Russell 2000 (RUT) slid 0.26% to 1,162.31. After falling back below the 50-day moving average earlier in the week, the index was able to reclaim it by week’s end. We are not confident in the 50-day moving average’s ability to offer support, so we view the 1,130 to 1,135 level as offering meaningful initial support.

The CBOE Volatility Index (VIX) dropped 11.9% this week to 15.05, its lowest level since August 18.

Computerized Investing Market Dashboard Indicators

This week, no Market Dashboard indicators triggered new bullish or bearish signals. Furthermore, there were no confirming bullish or bearish signals this week.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) edged upward by 0.78% this week to close at $102.09. However, this indicator remains bearish since the ETF ended the week below its 100-day moving average. The 100-day moving average of IYY's closing price fell to $102.57 from $102.83 a week ago. The spread between the IYY closing price and the moving average narrowed to -0.47% from last week’s spread of -1.49%.
  • The MACD of IYY ended the week once again above its signal line. Therefore, this indicator remains bullish. The MACD of IYY stands at +0.622, while the signal line is at +0.129. The indicator will remain bullish as long as the MACD ends the trading week with a “meaningful” gap above the signal line.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +109, up from +98 at the end of last week. This indicator will remain bullish until February 26, 2016, at which point the signal will go “stale” and revert to neutral. This “stale date” would be reset, however, if the indicator triggers a confirming bullish signal by registering a 750-point drop from a positive reading, or by registering another 750-point peak-to-trough decline.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 65.78, up from last week’s reading of 64.58. This indicator will remain bullish until it goes stale on April 1, 2016, and reverts to neutral. This assumes, however, that there are not any additional confirming bullish signals, which would be triggered by the indicator falling below the 25% level and then rising back above it. Alternatively, a new bearish signal would be generated if the indicator climbed above the 75% bearish threshold and then fell back below it.
  • The NYSE Bullish Percentage Index ($BPNYA) climbed to 46.75 this week from 44.13 a week ago. This indicator will remain bullish until it goes “stale” on February 26, 2016. At which point, the signal would revert to neutral. However, the “stale date” would be reset if the reading once again falls below the 30% bullish threshold and then rises above it. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below it.
  • The two component indicators of the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator remained bullish this week. Therefore, the overall indicator is also bullish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. The $NASI was above the moving average at the end of this week, making this component indicator bullish. $NASI ended the week at -260.63, versus the moving average at -325.34. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line ended this week above the signal line, so this component indicator is also bullish. The MACD of $NASI is +76.92, while the signal line is +46.826. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain bullish as long as the two component indicators are bullish.
  • The AAII Investor Bullish Sentiment reading fell 3.44 percentage points this week to 34.08%. However, this indicator will remain bullish unless a new bearish signal is triggered by bullish sentiment rising above the 50% bearish threshold and then falling back below it. The indicator would trigger a confirming bullish signal if the bullishness reading fell below the 25% bullish threshold and then rose back above it. If no new confirming bullish signals are triggered, or if the indicator does not trigger a new bearish signal before February 12, 2016, this signal would go “stale” and revert to neutral on that date.

For the week ending October 16, six CI Market Dashboard indicators are bullish, two are neutral and one is bearish.

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10/9/2015

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) jumped 3.7% this week to close at 17,084.49. The blue chip index scored a couple of technical victories this week. *First, it rose above the 17,000 mark for the first time since August. Secondly, it pushed north of its 50-day moving average for the first time since mid-July. We will look to the 50-day moving average for near-term support.

The S&P 500 Index (SPX) logged its best week of 2015 by soaring 3.3% to 2,014.89. The large-cap index climbed above the 2,000 mark for the first time since August. In addition, the index rose above its 50-day moving average for the first time since August. To the downside, we believe the 2,000 mark carries significant psychological support. Just below that is the 50-day moving average, which is currently 1,992.80.

All nine of the nine S&P Select Sector SPDR ETFs posted a gain this week. The energy sector (XLE) surged 7.97% this week to pace all sectors. The health care sector (XLV), however, missed out on much of this week’s gains, adding only 0.22%. The technology sector (XLK) climbed 3.49% for the week.

The broad market Wilshire 5000 (W5000) added 3.44% this week to end at 21,157.55. The index climbed above the 21,000 mark as well as its 50-day moving average. In the near-term, we view both as support levels.

The tech-laden Nasdaq Composite (COMP) rose 2.6% for the week to 4,830.47. While the index was able to climb above the 4,800 mark, it ran into resistance at its 50-day moving average. The 4,700 level may offer near-term support. Below that, we continue to look to the 4,550 level for more meaningful support.

Small stocks surged this week, as the Russell 2000 (RUT) jumped 4.6% to 1,165.36. The index was just able to claw its way above its 50-day moving average, which is at 1,163.46. We are not sure how solid of support this level will offer, so we still view the 1,050 level as offering meaningful initial support.

The CBOE Volatility Index (VIX) surrendered 18.4% to close the week at 17.08.

Computerized Investing Market Dashboard Indicators

This week, one Market Dashboard indicators triggered a new bullish signal (from bearish). There were no confirming bullish or bearish signals this week.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) gained 3.38% this week to close at $101.30. However, this indicator remains bearish since the ETF once again ended the week below its 100-day moving average. The 100-day moving average of IYY's closing price fell to $102.83 from $103.12 a week ago. The spread between the IYY closing price and the moving average narrowed significantly to -1.49% from last week’s -4.97%.
  • The MACD of IYY ended the week once again above its signal line. Therefore, this indicator remains bullish. The MACD of IYY stands at +0.102, while the signal line is at -0.546.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +98, up from -173 at the end of last week. This indicator will remain bullish until February 26, 2016, at which point the signal will go “stale” and revert to neutral. This “stale date” would be reset, however, if the indicator triggers a confirming bullish signal by registering a 750-point drop from a positive reading, or by registering another 750-point peak-to-trough decline.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 64.58, up from last week’s reading of 25.87. This indicator will remain bullish until it goes stale on April 1, 2016 and reverts to neutral. This assumes, however, that there are not any additional confirming bullish signals, which would be triggered by the indicator falling below the 25% level and then rising back above it. Alternatively, a new bearish signal would be generated if the indicator climbed above the 75% bearish threshold and then fell back below it.
  • The NYSE Bullish Percentage Index ($BPNYA) climbed to 44.13 this week from 30.89 a week ago. This indicator will remain bullish until it goes “stale” on February 26, 2016. At which point, the signal would revert to neutral. However, the “stale date” would be reset if the reading once again falls below the 30% bullish threshold and then rises above it. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below it.
  • The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator triggered a new bullish signal this week. The two component indicators turned bullish this week. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. The $NASI crossed over the moving average this week and remained there at week’s end. This makes this component indicator is bullish. $NASI ended the week at -414.12, versus the moving average at -498.64. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. This week, the MACD line crossed above the signal line and remained there at the market close. This bullish crossover triggered a bullish signal for this component indicator. The MACD of $NASI is 27.695, while the signal line is 14.234.
  • The AAII Investor Bullish Sentiment reading climbed 9.42 percentage points this week to 37.52%. This indicator will remain bullish unless a new bearish signal is triggered by bullish sentiment rising above the 50% bearish threshold and then falling back below it. The indicator would trigger a confirming bullish signal if the bullishness reading fell below the 25% bullish threshold and then rose back above it. If no new confirming bullish signals are triggered, or if the indicator does not trigger a new bearish signal before February 12, 2016, this signal would go “stale” and revert to neutral on that date.

For the week ending October 9, six CI Market Dashboard indicators are bullish, two are neutral and one is bearish.

 

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10/2/2015

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) added 1% this week to close at 16,472.37. The 16,000 level held as support, adding to its strength as a line of initial support. Below that, we look to the 15,500 level for the next line of support, marking the February 2014 lows.

The S&P 500 Index (SPX) was 1% higher this week, closing at 1,951.36. The index broke through initial support at the 1,920 level, but it did seem to find support around the 1,880 level, which is just above the intermediate lows of last October.

All but one of the nine S&P Select Sector SPDR ETFs posted a gain this week. This week, the Materials sector (XLB) paced all sectors by posting a 2.89% gain. Financials (XLF), were the only group to end the week in the red, dipping 0.48%. The technology sector (XLK) was up 0.68% for the week.

The broad market Wilshire 5000 (W5000) gained 0.69% this week to end at 20,453.86. The index broke through support at the 20,250 level. However, it found more meaningful support around the 19,750 level, which matches the intermediate lows of last October.

The tech-laden Nasdaq Composite (COMP) added 0.5% this week to close at 4,707.78. We continue to look to the 4,550 level for support. While the index violated this level in mid-August, this had served as meaningful support between December 2014 and January 2015.

Small stocks bucked the trend of the other major indexes this week, as the Russell 2000 (RUT) fell 0.77% to close at 1,114.12. The index fell through the 1,100 level, which we were looking to for initial support. We now view the 1,050 level as offering initial support, as this marks the lows of last October.

The CBOE Volatility Index (VIX) ended the week 11.3% lower at 20.94.

Computerized Investing Market Dashboard Indicators

This week, one Market Dashboard indicators triggered a new bearish signal (from neutral). There was also one bullish confirming signal this week.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) gained 0.80% this week to close at $97.99. This indicator remains bearish since the ETF once again ended the week below its 100-day moving average. The 100-day moving average of IYY's closing price fell to $103.12 from $103.56 a week ago. The spread between the IYY closing price and the moving average is now -4.97%, having narrowed from -6.13% at the end of last week.
  • The MACD of IYY ended the week once again just above its signal line. Therefore, this indicator remains bullish. The MACD of IYY stands at -1.095, while the signal line is at -1.141.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at -173, down from -86 at the end of last week. This indicator will remain bullish until February 26, 2016, at which point the signal will go “stale” and revert to neutral. This “stale date” would be reset, however, if the indicator triggers a confirming bullish signal by registering a 750-point drop from a positive reading, or by registering another 750-point peak-to-trough decline.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 25.87, up from 20.52 a week ago. This indicator triggered a confirming bullish signal, having risen above the 25% bullish threshold for the first time in seven weeks. By triggering a BULLISH confirming signal, the “stale” date on which the signal would revert to neutral in the absence of any additional confirming bullish signals has also been reset. The new “stale” date six months from now, which is April 1, 2016. Alternatively, a new bearish signal would be generated if the indicator climbed above the 75% bearish threshold and then fell back below it.
  • The NYSE Bullish Percentage Index ($BPNYA) dropped to 30.89 this week from last week’s reading of 36.25. This indicator will remain bullish until it goes “stale” on February 26, 2016. At which point, the signal would revert to neutral. However, the “stale date” would be reset if the reading once again falls below the 30% bullish threshold and then rises above it. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below it.
  • The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator triggered a new bearish signal this week, as its two component indicators are both flashing bearish signals. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. The $NASI ended the week below the moving average, so this component indicator is bearish. $NASI ended the week at -638.8, versus the moving average at -608.36. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. On Friday, the MACD line crossed below the signal line and remained there at the market close. This bearish crossover triggered a bearish signal for this component indicator. The MACD of $NASI is 6.32, while the signal line is 11.932.
  • The AAII Investor Bullish Sentiment reading fell 4.01 percentage points this week to 28.11%. This indicator will remain bullish unless a new bearish signal is triggered by bullish sentiment rising above the 50% bearish threshold and then falling back below it. The indicator would trigger a confirming bullish signal if the bullishness reading fell below the 25% bullish threshold and then rose back above it. If no new confirming bullish signals are triggered, or if the indicator does not trigger a new bearish signal before February 12, 2016, this signal would go “stale” and revert to neutral on that date.

For the week ending October 2, five CI Market Dashboard indicators are bullish, two are neutral and two are bearish.

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9/25/2015

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) dipped 0.4% this week to close at 16,314.67. This week the index broke convincingly through the upward trendline it had been forming over the last few weeks, a continuation of the trend we alluded to in last week’s commentary. This is a decidedly bearish development and we look to the 16,000 level for near-term support. Below that, we look to the 15,500 level for the next line of support, marking the February 2014 lows.

The S&P 500 Index (SPX) lost 1.4% for the week and closed at 1,931.34. Here we see a repeat of the DJIA, the S&P 500 index has broken out of its ascending triangle pattern to the downside. The 1,920 level appears to offer near-term support. Below that is the 1,870 level, which matches last October’s lows.

Only three of the nine S&P Select Sector SPDR ETFs posted a gain this week, led once again by the Utilities Sector (XLU), which added 1.18%. The Health Care Sector (XLV) fell victim to Presidential politics, as the sector fell 5.68% following a tweet by Hillary Clinton that she would, if elected, propose price caps on drugs. The technology sector (XLK) was down 0.62% for the week.

The broad market Wilshire 5000 (W5000) shed 1.72% this week to end at 20,313.52. This index also built downside momentum after breaking out of the ascending triangle pattern it had been forming. We continue to look to the 20,250 level for initial support. Below that we look for support around the 19,750 level, which matches the intermediate low of last October.

The tech-laden Nasdaq Composite (COMP) slumped 2.9% this week, hurt by the sell-off in biotech stocks, to close at 4,686.50. The index gapped downward on Tuesday, emphatically breaking out of its own ascending triangle pattern to the downside. In doing so, the index fell through near-term support at the 4,750 level. We now look to the 4,550 level for support. While the index violated this level in mid-August, this had served as meaningful support between December 2014 and January 2015.

Small stocks bore the brunt of investor dissatisfaction this week, with the Russell 2000 (RUT) tumbling 3.49% to close at 1,122.79. Not to be left out, the index broke out of its ascending triangle pattern to the downside. It also fell through support at the 1,130 level. We now look to the 1,100 level for initial support.

The CBOE Volatility Index (VIX) added 6% this week to close at 23.62.

Computerized Investing Market Dashboard Indicators

This week, one Market Dashboard indicators triggered a new neutral signal (from bullish). There were no confirming bullish or bearish signals for the week.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) fell 2.04% this week to close at $97.21. This indicator remains bearish since the ETF once again ended the week below its 100-day moving average. The 100-day moving average of IYY's closing price fell to $103.56 from $104.42 a week ago. The spread between the IYY closing price and the moving average is now -6.13% as it widened from -4.97% last week.
  • The MACD of IYY ended the week above its signal line, so this indicator remains bullish. The MACD of IYY stands at -0.942, while the signal line is at -0.979. The difference has dropped sharply over the last several trading days and if the differential narrows any further, this indicator will turn neutral or even bearish, if the downside separation between the MACD and signal line was significant enough.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at -86, down from -62 at the end of last week. This indicator will remain bullish until February 26, 2016, at which point the signal will go “stale” and revert to neutral. This “stale date” would be reset, however, if the indicator triggers a confirming bullish signal by registering a 750-point drop from a positive reading, or by registering another 750-point peak-to-trough decline.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 20.52, down from 24.77 a week ago. This indicator remains bullish. If the reading rises above the 25% bullish threshold and remains above it at week’s end, this would trigger a confirming bullish signal and reset the “stale” date on which the signal would revert to neutral. Currently, the “stale” date is January 29, 2016. Alternatively, a new bearish signal would be generated if the indicator climbed above the 75% bearish threshold and then fell back below it.
  • The NYSE Bullish Percentage Index ($BPNYA) dropped to 36.25 this week from 41.13 at the end of last week. This indicator will remain bullish until it goes “stale” on February 26, 2016. At which point, the signal would revert to neutral. However, the “stale date” would be reset if the reading once again falls below the 30% bullish threshold and then rises above it. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below it.
  • The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator triggered a neutral signal this week, as its two component indicators are flashing contradictory signals. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. The $NASI ended the week below the moving average, having crossed below it on Friday. Therefore, this component indicator is bearish. $NASI ended the week at -500.89 versus the moving average at -493.09. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line ended the week above its signal line, making this component indicator bullish. The MACD of $NASI is 36.579, while the signal line is 2.168. The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator will remain neutral as long as the two components indicators are not in agreement.
  • The AAII Investor Bullish Sentiment reading fell 1.14 percentage points this week to 32.12%. This indicator will remain bullish unless a new bearish signal is triggered by bullish sentiment rising above the 50% bearish threshold and then falling back below it. The indicator would trigger a confirming bullish signal if the bullishness reading fell below the 25% bullish threshold and then rose back above it. If no new confirming bullish signals are triggered, or if the indicator does not trigger a new bearish signal before February 12, 2016, this signal would go “stale” and revert to neutral on that date.
  • The Shiller CAPE ended the week at 24.52, down from 24.84 a week ago. This is the lowest reading since October 2013. However, the indicator remains neutral. With the median historical CAPE standing at 16.01, this week's reading is between the bearish threshold of 32.03 (twice the historical median) and the bullish threshold of 8.01 (one-half the historical median). If the Shiller CAPE reading were to cross above the bearish threshold (32.03), which is twice the historical median CAPE reading, and then fall below it, the indicator would trigger a bearish signal. Alternatively, if the CAPE reading were to fall below the bullish threshold (8.01), which is one-half the historical median level, and then cross back above it, the indicator would trigger a bullish signal.

For the week ending September 25, five CI Market Dashboard indicators are bullish, three are neutral and one is bearish.

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9/19/2015

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) slipped 0.3%, once again entering correction territory, to end the week at 16,384.79. Over the last few weeks, the index had been forming a series of lower highs and lower lows to create a triangle pattern. However, on Friday of this week, the index seemingly broke out of that pattern to the downside with a spike in trading volume. We look to the 16,000 level for near-term support. Below that, we look to the 15,500 level for the next line of support, marking the February 2014 lows.

The S&P 500 Index (SPX) lost 0.2% this week and closed at 1,958.08. Here, too, we had seen a triangle pattern forming, which often is a precursor to a significant price move. On Friday, the index broke out of the pattern to the downside on increased volume. The 1,920 level appears to offer near-term support. Below that is the 1,870 level, which matches last October’s lows.

Five of nine of the S&P Select Sector SPDR ETFs ended the week with a gain, making this one of the most mixed weeks in some time. The Utilities Sector (XLU) was the big winner from the Fed announcement that it would be holding interest rates steady for a while longer. The sector added 2.6% this week. The Materials Sector (XLB) fell 1.63% this week. The technology sector (XLK) dipped 0.54% this week.

The broad market Wilshire 5000 (W5000) ticked downward 0.06% to end this week at 20,668.74. This index also broke out of the ascending triangle pattern to the downside that it had been forming. We continue to look to the 20,250 level for initial support. Below that we look for support around the 19,750 level, which matches the intermediate low of last October.

The tech-laden Nasdaq Composite (COMP) bucked the trend of many other major indexes by clawing out a 0.1% gain this week to close at 4,827.23. The index appears to be forming an ascending triangle pattern, which is typically bullish. Earlier this week the index broke above the upper range of the triangle but was not able to hold it. Near-term support appears to exist around the 4,750 level. Below that there may be support around 4,350, which marked the gap up in mid-October as stocks were bouncing off their intermediate lows.

The Russell 2000 (RUT) was up 0.48% this week and closed at 1,163.37. It, too, appears to be forming a bullish ascending triangle. However, the upside break out of the pattern failed earlier this week. Near-term support appears to exist around 1,130. Below that is support just above the 1,100 level.

The CBOE Volatility Index (VIX) gave back 4% this week to close at 22.28.

Computerized Investing Market Dashboard Indicators

The iShares Dow Jones U.S. Index Fund (IYY) ticked upward this week by 0.06% to $99.23. The ETF was able to break above the $100 level earlier this week, but was not able to hold this key psychological barrier.

This week, no Market Dashboard indicators triggered new bullish or bearish signals. In addition, there were no confirming bullish or bearish signals for the week.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) inched upward by 0.06% this week to close at $99.23. This indicator remains bearish since the ETF once again ended the week below its 100-day moving average. The 100-day moving average of IYY's closing price fell to $104.42 from last week’s $104.73 reading. The spread between the IYY closing price and the moving average is now -4.97%, down from -5.3% a week ago.
  • The MACD of IYY ended the week above its signal line. Therefore, this indicator remains bullish. The MACD of IYY stands at -0.811, while the signal line is at -1.213.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at -62, up from -94 at the end of last week. This indicator will remain bullish until February 26, 2016, at which point the signal will go “stale” and revert to neutral. This “stale date” would be reset, however, if the indicator triggers a confirming bullish signal by registering a 750-point drop from a positive reading, or by registering another 750-point peak-to-trough decline.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 24.77, up from 19.0 a week ago. This indicator remains bullish. For the fifth week in a row the indicator has closed below the 25% bullish threshold. If the reading rises above 25% and remains there at week’s end, this would trigger a confirming bullish signal. In doing so, this would also reset the “stale” date on which the signal would revert to neutral in the absence of any additional confirming bullish signals or a new bearish signal before then. Currently, the “stale” date is January 29, 2016. Alternatively, a new bearish signal would be generated if the indicator climbed above the 75% bearish threshold and then fell back below it.
  • The NYSE Bullish Percentage Index ($BPNYA) climbed to 41.13 this week from 36.65 at the end of last week. This indicator will remain bullish until it goes “stale” on February 26, 2016. At which point, the signal would revert to neutral. However, the “stale date” would be reset if the reading once again falls below the 30% bullish threshold and then rises above it. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below it.
  • The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator remains bullish this week. Both of this indicators component indicators are flashing bullish signals this week. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. The $NASI ended the week above the moving average, which is why this component indicator is bullish. $NASI ended the week at -487.17, versus the moving average at -562.04. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line ended the week above its signal line, making this component indicator bullish as well. The MACD of $NASI is -3.273, while the signal line is -53.93.
  • The AAII Investor Bullish Sentiment reading fell 1.39 percentage points this week to 33.26%. This indicator will remain bullish unless a new bearish signal is triggered by bullish sentiment rising above the 50% bearish threshold and then falling back below it. The indicator would trigger a confirming bullish signal if the bullishness reading fell back below the 25% bullish threshold and then rose back above it. If no new confirming bullish signals are triggered, or if the indicator does not trigger a new bearish signal before February 12, 2016, this signal would go “stale” and revert to neutral on that date.

For the week ending September 18, six CI Market Dashboard indicators are bullish, two are neutral and one is bearish.

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9/4/2015

Author: Wayne A. Thorp, CFA

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) slid 3.2% this week to close at 16,102.38. This week, support re-formed just above the 16,000 level, so we will look to that level for near-term support. Below that, we look to the 15,500 level for the next line of support, marks the February 2014 lows.

The S&P 500 Index (SPX) dropped 1.5% this week to close at 1,921.22 and once again enter correction territory. This week, the 1,920 level offered some support, so we look to it for near-term support. Below that is the 1,870 level, which matches last October’s low.

All nine of the S&P Select Sector SPDR ETFs ended the week in the red. For the second week in a row, utilities tumbled this week as the yield on U.S. Treasuries climbed. The Utilities sector (XLU) plunged 5.08% this week. Consumer cyclicals (XLY) fared the “best” this week, losing “only” 2.26%. The technology sector (XLK) lost 3.2% this week.

The broad market Wilshire 5000 (W5000) shed 3.17% this week, closing at 20,304.16. This week the index found some support around 20,250. Below that we look for support around the 19,750 level, which matches the intermediate low of last October.

The tech-laden Nasdaq Composite (COMP) surrendered 3% this week to fall to 4,683.92. This decline also put the index into correction territory. This week, support formed around the 4,650 level. Below that there may be support around 4,350, which marked the gap up in mid-October as stocks were bouncing off their intermediate lows.

The Russell 2000 (RUT) fared slightly better than its counterparts this week, slipping 2.3% to 1,136.17. Near-term support formed this week around 1,130. Below that is support just above the 1,100 level.

The CBOE Volatility Index (VIX) climbed 6.7% this week to 27.8. This is the second-highest weekly close since late 2011.

Computerized Investing Market Dashboard Indicators

The iShares Dow Jones U.S. Index Fund (IYY) lost 3.1% this week and closed at $97.36. We see near-term support around the $95 level.

This week, one Market Dashboard indicators triggered a new bullish signal, from bearish. There were no confirming bullish or bearish signals for the week.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) dropped 3.13% this week to $97.36. This indicator remains bearish for the fifth week in a row. The 100-day moving average of IYY's closing price dipped to $105.00 from last week’s $105.36. The spread between the IYY closing price and the moving average is now -7.28%, down from -4.6% at the end of last week.
  • The MACD of IYY once again ended the week below its signal line. This indicator remains bearish for the fifth week in a row. The MACD of IYY stands at -1.951, while the signal line is at -1.723.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at -120, down from +8 a week ago. This indicator remains bullish for the second straight week. This indicator will remain bullish until February 26, 2016, at which point the signal will go “stale” and revert to neutral. This “stale date” would be reset, however, if the indicator triggers a confirming bullish signal by registering a 750-point drop from a positive reading, or by registering another 750-point peak-to-trough decline.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 15.0, down from last week’s reading of 17.74. However, this indicator remains bullish. For the third week in a row the indicator has closed below the 25% bullish threshold. If the reading rises above 25%, this would trigger a confirming bullish signal. In doing so, this would also reset the “stale” date on which the signal would revert to neutral in the absence of additional confirming bullish signals or a new bearish signal before then. Currently, the “stale” date is January 29, 2016. Alternatively, a new bearish signal would be generated if the indicator climbed above the 75% bearish threshold and then fell back below it.
  • The NYSE Bullish Percentage Index ($BPNYA) climbed to 34.22 from last week’s 34.03 reading. This indicator remains bullish for the second week in a row. This indicator will remain bullish until its goes “stale” on February 26, 2016. At which point, the signal would revert to neutral. However, the “stale date” will be reset if the reading once again falls below the 30% bullish threshold and then rises above it. Alternatively, the indicator would trigger a new bearish signal by rising above the 70% bearish threshold and then falling below it.
  • The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator triggered a new bullish signal this week. This indicator actually consists of two indicators, and they are both flashing bullish signals this week, which is why the overall signal is bullish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. The $NASI moved above the moving average this week and remained there at the close of the week. This makes this indicator bullish. $NASI ended the week at -795.39, versus the moving average at -812.32. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line crossed over the signal line to the upside this week and remained there at the close of trading for the week. This bullish crossover made the indicator bullish. The MACD of $NASI is -123.36, while the signal line is -129.836.
  • The AAII Investor Bullish Sentiment reading ticked downward by 0.12 percentage points this week to 32.38. However, the indicator remains bullish. This indicator will remain bullish unless a new bearish signal is triggered by the bullishness reading rising above the 50% bearish threshold and then falling back below it. The indicator would trigger a confirming bullish signal if the bullishness reading fell back below the 25% bullish threshold and then rose back above it. If no new confirming bullish signals are triggered, or if the indicator does not trigger a new bearish signal before February 12, 2016, this signal would go “stale” and revert to neutral on that date.
  • The Shiller CAPE ended the week at 24.36, down from 25.22 a week ago. This is the lowest reading since October 2013. However, the indicator remains neutral. With the median historical CAPE standing at 16.01, this week's reading is between the bearish threshold of 32.02 (twice the historical median) and the bullish threshold of 8.00 (one-half the historical median). If the Shiller CAPE reading were to cross above the bearish threshold (32.02), which is twice the historical median CAPE reading, and then fall below it, the indicator would trigger a bearish signal. Alternatively, if the CAPE reading were to fall below the bullish threshold (8.00), which is one-half the historical median level, and then cross back above it, the indicator would trigger a bullish signal.

For the week ending September 4, five CI Market Dashboard indicators are bullish, two are neutral and two are bearish.

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8/28/2015

Author: Wayne A. Thorp, CFA

Week in Review

Last week I posed the question as to whether or not last week’s sell-off would continue. The short answer is: kind of. Volatility remained the norm this week, with global equities seeing wild swings. In the end, however, investors and traders seemed mainly satisfied with the moves that the Chinese government took to shore up its wobbling stock market. As a result, global indexes rebounded somewhat from last week’s steep losses. There are still questions surrounding the strength of the Chinese economy, and volatility will most likely remain in the near-term. Whether the events of the last couple of weeks mark a buying opportunity or a precursor to a broader global economic and investing swoon remain to be seen.

Monday

Those expecting last Friday’s sell-off to carry into the new week were not disappointed on Monday. Right out of the gate U.S. stocks tumbled, with the Dow Jones Industrial Average plunging more than 1,000 points in the opening minutes of trading. However, as the day progressed, institutional money starting flowing back into the market, paring the day’s early losses.

The Dow Industrials ended down 588.40 points, or 3.6%, its lowest closing level in 18 months. Monday marked the largest one-day point decline ever on an intraday basis, according to The Wall Street Journal. The S&P 500 dropped 3.9%, officially entering correction territory as defined as a decline of 10% from a recent peak. This was the third trading session in a row that the S&P 500 fell by at least 2%, the first time since 2002, according to Schaeffer’s Investment Research. The Nasdaq Composite fell 3.8%.

The CBOE Volatility Index jumped to a six-year high before settling for a 45.3% gain to its highest close in nearly three years.

China’s Shanghai Composite sank 8.5% on Monday, entering negative territory for 2015. Japan’s Nikkei benchmark slumped 4.6%.

The pan-European Stoxx Europe 600 closed 5.3% lower, the biggest one-day decline since December 2008, according to The Wall Street Journal. Germany’s DAX dropped 4.7%, entering bear market territory after dropping more than 20% since its April peak.

Oil prices also fell sharply, with the U.S. oil benchmark settling down 5.5% at $38.24 a barrel, its first close below $40 a barrel since February 2009.

Tuesday

Moves by China to shore up its economy did little to assuage fears among investors on Tuesday, and U.S. stocks continued their downward trek. The People’s Bank of China (PBOC) announced it had cut interest rates and injected additional liquidity into its banking system. The move boosted European stocks and U.S. markets at Tuesday’s open. However, this provided anxious investors an opportunity to sell shares at higher prices than in previous days and U.S. stocks turned lower as the day progressed.

The Dow Jones Industrial Average was up as much as 442 points, but a rash of selling ahead of the market close sent the blue-chip to a 1.3% loss on the day. The S&P 500 fell 1.4% to its lowest level since last October. The Nasdaq Composite Index declined 0.4%.

The CBOE Volatility Index was down as much as 31%, but by day's end had pared its losses to 11.6%.

Shares in Shanghai fell 7.6% to close at its lowest level since December. Japan’s Nikkei closed 4% lower.

However, European shares rebounded sharply. The Stoxx Europe 600 index closed 4.2% higher, its biggest one-day gain since September 2011. Germany’s DAX rose 5%, France’s CAC 40 climbed 4.1%, and the U.K.’s FTSE 100 was 3.1% higher.

Oil prices also steadied, with Brent crude 1.2% higher and U.S. crude gaining 2.8%.

Wednesday

U.S. stocks came roaring back on Wednesday, snapping a six-day losing streak and posting some of their largest gains in years, as signs of strengthening U.S. economy harried nerves among investors. Perhaps more significant, the upside momentum picked up steam as the day progressed, unlike Tuesday’s late-day sell-off.

Federal Reserve Bank of New York President William Dudley said that the argument for a September rate increase has grown “less compelling” and better-than-expected durable goods orders brought investors and traders back into equities. Bargain hunters are also finding the current market environment more appealing. As of Tuesday’s close, the S&P 500 is trading at 16.6 times its trailing 12-months earnings, according to FactSet. That is higher than its 10-year average of 15.7 times earnings, but is down from the 18.7 level the market was trading at as of August 17.

The Dow industrials surged 619.07 points, or 3.95%. , to 16285.51 following the six-day rout that wiped out more than $2 trillion in market capitalization from U.S. stocks. The S&P 500 Index added 3.9% and the Nasdaq Composite climbed 4.24%.

The CBOE Volatility Index ended near a session low after giving up 15.8%. However, the “fear gauge” appears to have found some support around 30.

Thursday

U.S. posted strong gains for a second day in a row on Thursday, pushing some of the major indexes back into positive territory for the week. This came on the heels of better-than-expected growth in U.S. gross domestic product in the second quarter and upward revisions to consumer spending and business investment.

The Dow Jones Industrial Average jumped 2.3%, capping off its biggest two-day point gain ever, according to The Wall Street Journal. The S&P 500 gained 2.4% and the Nasdaq Composite added 2.45%.

The CBOE Volatility Index posted its third straight decline, shedding 13.9%.

The Shanghai Composite Index led Asian markets higher, closing up 5.3% after five consecutive days of losses.

The pan-European Stoxx Europe 600 closed 3.5% higher.

Oil prices staged a rebound, rising 10% in New York, the biggest percentage gain in six years. That spurred a recovery in oil and gas stocks, with energy companies in the S&P 500 gaining 4.9%.

Friday

After a roller coaster week, U.S. stocks took a bit of a breather on Friday to find their sea legs. However, a late-day rally pushed most U.S. indexes to a gain for the day.

The Dow Jones Industrial Average declined 0.07%, rebounding from being down triple-digits earlier in the day. The S&P 500 ticked upward by 0.06% and the Nasdaq Composite added 0.32%.

The CBOE Volatility Index edged downward 0.2% on Friday.

The Shanghai Composite Index ended 4.8% higher Friday amidst speculation that the Chinese government had stepped in to support the market. Japan’s Nikkei rose 3%, while Hong Kong’s Hang Seng lost 1%.

The pan-European Stoxx Europe 600 index ended 0.3% higher.

Crude-oil futures surged 6.2%.

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) added 1.1% this week to close at 16,643.01. This was a remarkable turnaround after falling to levels not seen since early 2014 on Monday. Monday’s drop took out round-number support at 16,000, but the index found footing around the 15,500 level, which matched the February 2014 low.

The S&P 500 Index (SPX) notched a 0.9% gain for the week, closing at 1,988.87. Monday’s sharp sell-off pushed the index all the way down to the 1,870 level, its lowest level since October of last year. We look for near-term support around the 1,870 level, which matches last October’s low.

Seven of the nine S&P Select Sector SPDR ETFs posted a gain this week. In a rare occurrence, the Energy sector (XLE) was the top-performing sector, posting a 3.53% gain on rebounding oil prices. The Utilities Sector (XLU) brought up the rear with a 4.22% decline. The technology sector (XLK) added 2.63%.

The broad market Wilshire 5000 (W5000) gained 0.95% this week, closing at 20,968.30. The index found support on Monday around the 19,750 level, which matched the intermediate low of last October. We did see a “death cross” in the Wilshire, as the 50-day moving average ticked just below the 200-day average.

The tech-laden Nasdaq Composite (COMP) tacked on 2.6% this week to 4,828.32. Earlier in the week, the index found support around 4,350, which marked the gap up in mid-October as stocks were bouncing on their intermediate lows.

The Russell 2000 (RUT) climbed 0.53% to 1,162.91 this week. On Monday and Tuesday, the index found support just above the 1,100 level. This was just below the theoretical target following last week’s formation of a bearish “head and shoulders” pattern.

The CBOE Volatility Index (VIX) shed 7.1% this week to close at 26.05.

Earnings Announcements & Tech News

Here are earnings announcements and news from the companies that provide the equipment, websites or services that the staff and editors of Computerized Investing use or follow (consensus estimates are from I/B/E/S):

  • There were no earnings reports of note this week.

Apple Inc. (AAPL) chief executive Tim Cook may have violated federal disclosure rules on Monday when he offered a mid-quarter update on the company’s performance in a private email to CNBC’s Jim Cramer. In the email, confirmed by Apple, Cook said that iPhone activations have accelerated over the past few weeks, despite growing economic concerns in China and the government’s moves to devalue the yuan. He also wrote that Apple’s App Store had recorded its best performance of the year in China during that time.

However, the private disclosure, which was tweeted by CNBC reporter Carl Quintanilla and read on air at CNBC, may have violated the Securities and Exchange Commission’s fair-disclosure regulation. According to MarketWatch, the media typically get a pass under the disclosure rules. However, Cramer also co-manages a portfolio, Action Alerts PLUS, which has a long position in Apple, according to a recent disclosure on the website TheStreet.

The SEC declined to comment on the Cook email and any investigation it may undertake. Apple declined to comment beyond confirming the email.

Also, Apple confirmed that it will hold an event on September 9. Rumors have swirled about the products Apple could unveil, and some reports suggest it may announce a next-generation iPhone. However, Apple did not immediately respond to a request for comment on the nature of the event.

In an invitation sent Thursday, Apple prompted people to ask Siri, the automated assistant programmed into iPhones, for a "hint" about the event. Siri yielded varying responses, like "I bet you were one of those kids who snuck downstairs to open presents."

International Data Corporation (IDC) released its worldwide wearable quarterly report for second quarter. The report indicates that Fitbit (FIT) still retains the top spot in the wearable market. The fitness tracker company shipped 4.4 million units in the second quarter of 2015 and retains a 24.3% market share. Apple Watch, however, is close behind and claims the second position with 3.6 million units shipped in the second quarter. This amounts to 19.9% market share for a product that did not even exist a year ago.

According to the report, Apple is just 0.8 million units behind Fitbit and could easily capture the lead.

Global Economic News & Data

Here is a recap of this week’s key economic data and news:

Domestic

  • The Commerce Department reported that sales of new U.S. single-family homes increased 5.4% to a seasonally adjusted annual rate of 507,000 units. June's sales pace was revised slightly down to 481,000 units from the previously reported 482,000 units. Economists polled by Reuters had forecast new home sales rising to a 510,000 unit-rate. Sales were up 25.8% compared to July of last year.
  • The Conference Board's Consumer Confidence Index bounced to 101.5 in August, surpassing estimates. Economists polled by Reuters expected a reading of 93.3. July's reading was 91.0. A reading on the present situation for U.S. consumers hit 115.1 in August, the highest since November 2007, compared to the revised reading of 104.0 in July. The report's 'jobs hard-to-get' index dropped to 21.9 versus the upwardly revised figure of 27.4 last month.
  • A gauge of 10-year inflation expectations in the U.S. government bond market fell to its lowest level since 2009 this week. Federal Reserve officials have said they intend to pursue policies that will enable inflation to rise to its 2% target in the medium term. As a result, Fed funds futures, used to place bets on the central bank’s policies, showed that investors and traders see a 21% likelihood of a rate increase at the September Fed meeting, according to data from CME Group. This is less than half the level from two weeks ago.
  • Federal Reserve Bank of New York President William Dudley said the case for a September rate increase has grown “less compelling” given the turmoil in markets around the world. However, Dudley also said that a September move was still possible if markets stabilize and new data show the U.S. economy remains on track, adding that the case “could become more compelling by the time of the meeting as we get additional information.”
  • The Commerce Department reported that orders for durable goods increased 2% in July after a 4.1% gain in June. Orders in a category that serves as a proxy for business investment increased 2.2% in July following a 1.4% rise in June. These orders had fallen in four of the previous five months.
  • U.S. gross domestic product, the broadest measure of goods and services produced across the U.S., expanded 3.7% in the second quarter, the Commerce Department reported. This is well ahead of expectations and up from an initial estimate of 2.3% growth.
  • Unemployment applications dropped by 6,000 to 271,000 in the week ended August 22, the Labor Department reported. The median forecast of economists surveyed by Bloomberg called for 274,000 jobless claims. The four-week average of claims, a less-volatile measure than the weekly figure, rose to 272,500 from 271,500 in the prior week.
  • The Commerce Department reported consumer spending increased 0.3% after an upwardly revised 0.3% rise in June. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, was previously reported to have gained 0.2% in June. Economists polled by Reuters had forecast consumer spending rising 0.4% last month.
  • The University of Michigan's final reading on consumer confidence in August came in at 91.9, down from the prior month and below expectations. The preliminary reading came in at 92.9 and the final number was expected to come in at 93.0.
  • Speaking at a conference of the world’s central banks in Jackson Hole, Wyoming, Fed Vice Chairman Stanley Fischer said the central bank hasn’t yet settled on whether to raise rates next month.

International

  • The People’s Bank of China (PBOC) cut interest rates and injected liquidity into its banking system in an effort to bolster its economy and stabilize China’s equity market.

Computerized Investing Market Dashboard Indicators

The iShares Dow Jones U.S. Index Fund (IYY) rebounded 0.67% this week to $100.51 this week. On Monday, in intraday trading, the ETF traded as low as $53.68 before finding support around the $95 level.

This week, two Market Dashboard indicators triggered new bullish signals (both from neutral). There were no confirming bullish or bearish signals for the week.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) ended the week with a 0.67% gain to $100.51 after being down as much as 46.2% on an intraday basis from last Friday’s close. However, this indicator remains bearish. The 100-day moving average of IYY's closing price dipped to $105.36 from last week’s $105.69. The spread between the IYY closing price and the moving average is now -4.6%, up from -5.36% as of last week’s close.
  • The MACD of IYY again ended the week below its signal line. Therefore, this indicator remains bearish. The MACD of IYY stands at -1.835, while the signal line is at -1.314.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at +8, above the -36 reading at the end of last week. The strong sell-off on Monday sent the indicator plunging to -1328, the lowest level since August 2011. This marked a 1,268-point peak-to-trough decline over the last 10 trading days. However, the peak was still below zero, so the magnitude of the decline did not trigger a new bullish signal. Instead, by falling below the -750 level, this indicator triggered a new bullish signal. If the indicator does not trigger any confirming bullish signals by registering a 750-point drop from a positive reading, or by registering another peak-to-trough decline, the signal will go “stale” and revert to neutral on February 26, 2016.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 17.74, down from last week’s reading of 18.9. However, this indicator remains bullish. For the second week in a row the indicator has closed below the 25% bullish threshold. If the reading rises back above 25%, this would trigger a confirming bullish signal. In doing so, this would also reset the “stale” date on which the signal would revert to neutral if there were no confirming bullish signals or a new bearish signal before then. Currently, the “stale” date is January 29, 2016. Alternatively, a new bearish signal would be generated if the indicator climbed above the 75% bearish threshold and then fell back below it.
  • The NYSE Bullish Percentage Index ($BPNYA) fell to 29.229 on Wednesday before closing the week at 34.03. By falling below the 30% bullish threshold and then rising back above that level, this triggered a new bullish signal. If the indicator does not trigger a new bearish signal by rising above the 70% bearish threshold and then falling below it, or if it does not trigger a confirming bullish signal by once again falling below 30% and then rising above it, this signal will go “stale” on February 26, 2016, and revert to neutral.
  • The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation remained bearish this week. This indicator actually consists of two indicators, and they are both flashing bearish signals this week. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. The $NASI ended the week below the moving average, making this indicator bearish. $NASI ended the week at -856.37, versus the moving average at -824.15. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line closed the week below the signal line, making this indicator bearish. The MACD of $NASI is -146.264, while the signal line is -122.414.
  • The AAII Investor Bullish Sentiment reading climbed 5.68 percentage points this week to 32.5. The indicator remains bullish. This indicator will remain bearish until a new bearish signal is triggered by the bullishness reading rising above the 50% bearish threshold and then falling back below it. The indicator would trigger a confirming bullish signal if the bullishness reading fell back below the 25% bullish threshold and then rose back above it. If no new confirming bullish signals are triggered, or if the indicator does not trigger a new bearish signal before February 12, 2016, this signal would go “stale” and revert to neutral on that date.

For the week ending August 28, four CI Market Dashboard indicators are bullish, two are neutral and three are bearish.

 

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8/21/2015

Author: Wayne A. Thorp, CFA

Week in Review

Ugly. This was the word used throughout the financial media to describe this week for U.S. equities. Weak domestic economic data, continued worries about China and conflicting statements from the Federal Reserve had investors on edge this week. The sell-off started in China and spread around the globe, with investors in the U.S. fleeing from risk.

The question on the minds of many investors and traders is whether next week will be even uglier.

Monday

Monday did start the week on a high note as the positive momentum from last week carried over. 

The Dow Jones Industrial Average gained 0.4%; the S&P 500 rose 0.5% to reclaim the high ground above 2,100; and the Nasdaq Composite gained 0.9%. According to The Wall Street Journal, around 5.4 billion shares traded Monday, compared with an average daily volume of 6.5 billion shares year-to-date.

In Europe, the Stoxx Europe 600 index gained 0.3% while Germany’s DAX fell 0.4%. France’s CAC 40 index gained 0.6%.

In Asia, China’s Shanghai Composite gained 0.7%, but Hong Kong’s Hang Seng fell 0.7%.

Oil futures fell 1.5% to a fresh six-year low.

The CBOE Volatility Index ticked upward by 1.5%.

Tuesday

Consumer and energy stocks pulled the major U.S. indexes lower on Tuesday.

The Dow Jones Industrial Average slid 0.2%; the S&P 500 lost 0.3% to fall below the 2,100 mark; and the Nasdaq Composite dropped 0.6%. A 3.4% drop in Wal-Mart (WMT) shares took 16.2 points off the Dow after the company cut its earnings guidance for the year to between $4.40 and $4.70 a share, from its previous forecast of $4.70 to $5.05 a share. Shares of Exxon Mobil (XOM) lost 1.1% despite a 1.8% rise in crude-oil futures.

Germany’s DAX index slipped 0.2% and France’s CAC 40 fell 0.3%, while the pan-European Stoxx Europe 600 rose 0.2%.

The Shanghai Composite Index dropped 6.1% even as China’s central bank injected a large amount of cash into the financial system.

The CBOE Volatility Index added 5.9%.

Wednesday

A renewed slump in oil prices sent energy stocks lower on Wednesday, which in turn pressured the major U.S. indexes. In addition, the minutes from the Federal Reserve’s July meeting failed to offer clear guidance as to whether the central bank will raise interest rates next month. The minutes showed that some Fed officials are harboring doubts about the health of the global economy.

The Dow Jones Industrial Average fell 0.9%; the S&P 500 declined 0.8%; and the Nasdaq Composite lost 0.8%.

The Shanghai Composite Index ended up 1.2% after falling as much as 5%, according to The Wall Street Journal.

In Europe, Germany’s DAX was down 2.1% and France’s CAC-40 lost 1.75%.

Oil prices fell to a fresh six-year low after data showed an unexpected increase in U.S. stockpiles. Crude-oil futures dropped 4.3%.

The CBOE Volatility Index added 10.6% to close above its 200-day average for the first time since July 27.

Thursday

U.S. stocks were sent tumbling on Thursday over worries about China’s economy and financial market turmoil. The sell-off started in Asia and spread to Europe and finally the U.S.

The Dow shed 2.1% to fall below the 17,000 level, its lowest finish since October 2014. The S&P 500 lost 2.1%, falling into negative territory for the year. The Nasdaq Composite dropped 2.8% to fall below round-number support at 5,000 and its 200-day moving average.

The Shanghai Composite dropped 3.4%.

France’s CAC-40 declined 2.1% and Germany’s DAX lost 2.3%.

Crude-oil futures rose 0.8%.

The CBOE Volatility Index surged 25.5% to its highest level in a month.

Friday

The global sell-off in equities continued on Friday on continued fears of a global economic slowdown. Stock and commodities plummeted on fresh evidence that China’s economy is slowing.

The Dow industrials lost 3.1%, posting its third consecutive triple-digit drop and its biggest single-day decline since August 2011.  The decline also put the Dow in correction territory, as defined by a 10% decline from a recent high. The S&P 500 dropped 3.2% to close below 2,000 for the first time since late January. The Nasdaq Composite fell 3.5%.

The Shanghai Composite Index tumbled 4.3%, hitting its lowest level since March. In Japan, the Nikkei fell 3% to a six-week low.

The pan-European Stoxx Europe 600 ended the session 3.3% lower, posting its biggest weekly loss since August 2011, according to The Wall Street Journal. In addition, the index has now lost nearly 13% since its April peak, also entering correction territory.

Brent crude oil, the global benchmark, fell 2.5%, its lowest level since January. The U.S. benchmark settled down 2.1% at $40.45 a barrel after trading below $40 a barrel for the first time since the 2009 financial crisis.

The CBOE Volatility Index jumped 46.5%, to its highest level since October.

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) gave up 5.8% this week to close at 16,459.75, its lowest close of the year. The Dow’s more than 1,000-point drop this week was the largest weekly drop since the week ended Oct. 10, 2008 and the largest week-over-week decline in almost four years. The blue chip index broke through multiple support levels this week. We now look to 16,100 to 16,200 level as the next line of support, which mark the lows of last October.

The S&P 500 Index (SPX) sank 5.8% and closed at 1,970.89, its first close below 2,000 since January. The large-cap index moved sharply below its 200-day moving average, as well as other key support levels. It seems to have found footing at December’s lows. According to Schaeffer’s Investment Research, the move below the 2,040 level sets up the potential for a bearish 'head and shoulders' pattern. If this occurs, the target would be 1,950.

None of the nine S&P Select Sector SPDR ETFs posted a gain this week. The Utilities sector (XLU) weathered the storm the best this week, losing only 1.14%. The Energy sector (XLE) was hammered, dropping 8.48%. The technology sector (XLK) was down 6.74% for the week.

The broad market Wilshire 5000 (W5000) lost 5.6% this week, closing at 20,770.28. The index fell through its 200-day moving average and support at the 21,625 and 21,000 levels. The next line of support is the December low around 20,750.

The tech-laden Nasdaq Composite (COMP) tumbled 6.8% this week to 4,706.04, posting its worst week since 2011. This also put the index into correction territory.  The index fell through its 200-day moving average but appears to have found near-term support around 4,700. Below that there is support around 4,575, which served as support on multiple occasions between December and January.

The Russell 2000 (RUT) shed 4.6% for the week, closing at 1,156.79. It, too, entered correction territory this week. The index fell through round-number support at 1,200, but may have found support in the 1,150 to 1,160 level. Schaeffer’s Investment Research noted, however, that the break below 1,200 may indicate the formation of a bearish "head and shoulders" formation, with 1,200 serving as the neckline. The theoretical targeted downside would be 1,115.

The CBOE Volatility Index (VIX) soared 118.8% this week to close at 28.03. This was the biggest weekly rise in the “fear barometer” in the modern VIX era, according to Schaeffer’s.

Earnings Announcements & Tech News

Here are earnings announcements and news from the companies that provide the equipment, websites or services that the staff and editors of Computerized Investing use or follow (consensus estimates are from I/B/E/S):

  • Hewlett-Packard (HPQ) reported earnings of $0.88 per share, 3.0% above the consensus estimate of $0.854.
  • Intuit (INTU) reported earnings of $(0.05), 124.0% above the consensus estimate of $(0.112).

Intuit (INTU) announced that it would sell its Quicken unit, the group that creates the personal finance software. On a conference call with Wall Street analysts, chief executive Brad Smith said Intuit would focus on its small business and tax software, represented by QuickBooks and TurboTax, respectively, which both have strong cloud- and subscription-based businesses, and is dropping Quicken because, as a strictly desktop product, it has neither.

Global Economic News & Data

Here is a recap of this week’s key economic data and news:

Domestic

  • New York state business conditions in August contracted for the third time in five months and fell to its lowest level since 2009, according to data released by the Federal Reserve Bank of New York. The Empire State’s business conditions index fell to -14.9 this month from 3.86 in July. Economists surveyed by The Wall Street Journal expected the latest index to increase to 4.5. A reading below 0 indicates contraction.  The new orders index for state manufacturers, a proxy for demand, dropped to -15.7 from -3.50 in July. The unfilled orders index improved, though, rising to -4.5 from -7.45 in July. The shipments index fell to -13.8 from 7.88 last month. Inventories were lower, with the index falling to -17.3 from -8.51 in July. Labor market indicators pointed to little change in employment and hours worked. The index for number of employees ticked downward to 1.82 from 3.19, and the average workweek index fell to -1.82 from 4.26. Pricing power among New York state manufacturers slipped, with the prices paid index dipping to 7.27 from 7.45 in July and prices received dropping to 0.91 from 5.32 in July. However, New York state manufacturers still showed optimism about the six-month outlook. The index for future business activity climbed seven points to 33.6 while the index for future shipments rose eight points to 33.0.
  • The NAHB/Wells Fargo Housing Market index rose to 61 from 60 in July. This was the highest mark since a matching reading in November 2005. It was in line with economists' expectations, according to a Reuters’ poll. Readings above 50 indicate more builders view market conditions as favorable than poor. The single-family home sales component rose to 66 from 65 to mark its highest level since November 2005. The gauge of single-family sales expectations for the next six months was steady at 70, while prospective buyer traffic rose to 45 from 43 to mark the highest reading since December.
  • Housing starts rose 0.2% in July from a month earlier to an annual rate of 1.21 million, according to the Commerce Department. This was the fastest pace of growth since October 2007. Economists polled by MarketWatch had expected starts to total a seasonally adjusted 1.19 million. New home construction in June were also revised up to a 1.20 million pace from 1.17 million.
  • Federal Reserve officials want to see more improvement in the labor market and signs that inflation is returning to a 2% target before raising interest rates, according to the minutes of a Federal Open Market Committee meeting in July. Most members "judged that the conditions for policy firming had not yet been achieved, but they noted that conditions were approaching that point," the minutes say.
  • The amount of crude held in U.S. commercial stockpiles unexpectedly rose last week, according to data released by the U.S. Energy Information Administration (EIA). In the weekly EIA report, average daily U.S. output fell in the week ended August 14 by only 0.5%. The decline was more than offset by the growth in imports, up 6.1% for the week.
  • The Labor Department reported its Consumer Price Index edged up 0.1% last month, the sixth straight monthly increase. In the 12 months through July, the CPI climbed 0.2%. The so-called core CPI, which strips out food and energy costs, rose only 0.1% last month. In the 12 months through July, the core CPI increased 1.8%.
  • Jobless claims rose for a fourth straight week, to the highest level in more than a month, according to the Labor Department. Initial jobless claims rose by 4,000 to a seasonally adjusted 277,000 in the seven days ended August 15. The average of new claims over the past month climbed by 5,500 to 271,500.
  • The National Association of Realtors reported existing home sales rose 2% to a seasonally adjusted annual rate of 5.59 million, the highest rate since February 2007. Economists polled by MarketWatch expected a 5.48 million sales rate. The rate has increased for three straight months and is 10.3% higher than a year ago.
  • The Markit flash purchasing managers’ index (PMI) dipped to 52.9 from 53.8 in July. Readings over 50 indicate that more manufacturers are growing instead of contracting. However, the pace of growth slowed to its lowest rate since October 2013.

International

  • The Greek government used part of a €13 billion emergency loan from the eurozone to make a €3.2 billion payment to the European Central Bank, heading off a default. Greece plans to use €10 billion to steady the banking sector.
  • The preliminary August reading for the Caixin China purchasing managers' index has fallen to 47.1, the lowest level in more than six years. The drop comes on the heels of a 47.8 reading in July, a two-year low. Data from subindexes suggest that overall new orders and orders for exports are falling faster than a month ago.

Computerized Investing Market Dashboard Indicators

The iShares Dow Jones U.S. Index Fund (IYY) dropped 5.4% this week to $99.84, its lowest close since January.

The ETF plunged through its 200-day moving average and tested round-number support at $100. Below that, there may be support around $99.

This week, no Market Dashboard indicators changed signals. In addition, there were no confirming bullish signal for the week.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) fell 5.4% this week to close at $99.84. This indicator remains bearish. The 100-day moving average of IYY's closing price ticked downward to $105.69 from last week’s $105.70. The spread between the IYY closing price and the moving average is now -5.36%, down from -0.19% as of last week’s close.
  • The MACD of IYY once again closed the week below its signal line, so the indicator remains bearish. The MACD of IYY stands at -0.694, while the signal line is at -0.234.
  • The net number of NYSE stocks hitting a new 52-week high at the close of this week compared to the number of new lows ended the week at -632, well below the -36 at the end of last week. This is the lowest reading since October of 2011. However, this indicator has not seen the 750-point peak-to-trough decline over the last 10 trading days needed to trigger a new bullish signal. Over the last 10 trading days, the indicator has fallen from a high of -60 to a low of -632, a 572-point drop. Furthermore, the indicator did not fall to the -750 level, which would also trigger a new bullish signal. Therefore, the indicator remains neutral.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 18.9, well below last week’s reading of 37.27. This indicator remains bullish. This week the indicator fell below the 25% bullish threshold. If the reading rises back above 25%, this would trigger a confirming bullish signal. In doing so, this would reset the “stale” date on which the signal would revert to neutral if there were no confirming bullish signals or a new bearish signal before then. Currently, the “stale” sate is January 29, 2016.
  • The NYSE Bullish Percentage Index ($BPNYA) closed the week at 41.86, down from 48.23 a week ago. This is the lowest reading since October. However, the dashboard indicator remains neutral since it did not fall from above the 70% bearish threshold this week, nor did it rise from below the 30% bullish threshold.
  • The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation remained bearish. This indicator actually consists of two indicators, and they are both flashing bearish signals this week, which is why the overall signal is bearish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. The $NASI ended the week below the moving average, making this indicator bearish. $NASI ended the week at -677.85, versus the moving average at -602.23. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line closed the week below the signal line, making this indicator bearish. The MACD of $NASI is -100.54, while the signal line is -94.231.
  • The AAII Investor Bullish Sentiment reading fell 3.63 percentage points this week to 26.82 and the indicator remains bullish. This indicator will remain bearish until a new bearish signal is triggered by the bullishness reading rising above the 50% level and then falling back below it. The indicator would trigger a confirming bullish signal is the bullishness reading fell back below the 25% level and then rose back above it. If no new confirming bullish signals are triggered, or if the indicator does not trigger a new bearish signal before February 12, 2016, this signal would go “stale” and revert to neutral on that date.
  • The Shiller CAPE ended the week at 24.99, down from last week’s reading of 26.52. This is the lowest reading since May 2014. With the median historical CAPE standing at 16.00, this week's reading is between the bearish threshold of 32.00 (twice the historical median) and the bullish threshold of 8.00 (one-half the historical median). Therefore, the indicator remains neutral.

For the week ending August 21, two CI Market Dashboard indicators are bullish, four are neutral and three are bearish.

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8/14/2015

Author: Wayne A. Thorp, CFA

Week in Review

This week was marked by mega-mergers, currency devaluations and a mixed bag of economic data. As a result, U.S. markets went on a rollercoaster ride. Amidst it all, the latest earnings season played on, with 465 companies in the S&P 500 having reported, second-quarter profits are on track to slide 0.7% from a year ago. However, that is better than the 4.5% drop forecast at the start of the earnings season, according to FactSet.

Monday

U.S. stocks jumped out of the gates on Monday on merger news involving Warren Buffett’s Berkshire Hathaway, which announced it would buy Precision Castparts Corp. for about $32 billion, its biggest buyout ever. Adding to investor optimism was a new round of weak economic data from China, which lifted expectations of additional stimulus from the Chinese government.

The Dow Jones Industrial Average gained 1.4%, 17615.17, snapping its seven-session losing streak. The S&P 500 rose 1.3% and the Nasdaq Composite advanced 1.2%.

The CBOE Volatility Index dropped 8.7%, closing below both its 10- and 20-day moving averages.

European stocks extended their gains. The Stoxx Europe 600 added 0.7%. Germany’s DAX rose 1% and France’s CAC-40 advanced 0.8%.

Oil prices reversed an early loss, jumping 2.5%.

Tuesday

U.S. stocks were jolted by the surprising devaluation of China’s currency on Tuesday in an attempt to jump-start its stumbling economy. The People’s Bank of China (PBOC) set the yuan’s Tuesday's midpoint at 6.2298 per dollar, compared with 6.1162 on Monday. Following the news, China's spot yuan fell nearly 2% to 6.3270, its biggest one-day loss in decades. The move sparked renewed concerns about slowing growth from one of the world’s biggest importers of raw materials, sending commodity prices falling.

The Dow Jones Industrial Average fell 1.2%; the S&P 500 fell 1%; and the Nasdaq Composite fell 1.3%.

The CBOE Volatility Index jumped 12.1% to move back above its 10- and 20-day moving averages.

The pan-European Stoxx Europe 600 index closed 1.6% lower. However, Athens stocks bucked the trend after Greece and its international creditors agreed on the terms of a third bailout. The deal could provide as much as €86 billion in financing if it is ratified by other eurozone governments. The Athex Composite index closed 2.1% higher.

Oil fell 4.3%.

Wednesday

U.S. stocks fell at the open on Wednesday on news of another currency devaluation from China. However, stocks made a late-session comeback to erase the day’s losses as crude oil bounced back from six-year lows and speculation that the recent yuan devaluation could push back the Federal Reserve’s decision on raising short-term interest rates.

The Dow Jones Industrial Average was all but unchanged for the day, closing just 0.3 point lower after being down as much as 275 points on the day; the S&P 500 Index gained 0.1%; and the Nasdaq Composite added 0.2%.

The CBOE Volatility Index ticked lower by 0.7%.

Thursday

U.S. stocks took a breather on Thursday after seeing a spike in volatility following the devaluation of China’s currency.

The Dow Jones Industrial Average finished up less than 0.1% after trading in a triple-digit range for the 18th straight day, according to Schaeffer’s Investment Research; the S&P 500 slipped 0.1%; and the Nasdaq Composite Index fell 0.2%. Oil prices fell to a six-year low, pushing the S&P 500 Energy index down 1.4%.

The CBOE Volatility Index fell 0.9%, but remained above its 10- and 20-day moving averages.

The pan-European Stoxx Europe 600 rose 1%, and Germany’s DAX advanced 0.8%.

Crude-oil futures lost 2.5% to finish at their lowest level since March 2009.

Friday

The U.S. markets ended the week on a bit of a high note on Friday, following a very volatile week of trading. The markets cheered the announcement that the European Commission had approved an 86-billion-euro, three-year loan to Greece.

The Dow Jones Industrial Average rose 0.4%; the S&P 500 gained 0.4%; and the Nasdaq Composite added 0.3%.

The CBOE Volatility Index dropped 4.9%, settling just below its 10- and 20-day moving averages.

Crude-oil futures rose 0.6%.

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) added 0.6% this week to close at 17,477.40. This week marked the formation of an ominous “death cross” for the blue-chip index, as the faster 50-day moving average crossed below the slower 200-day moving average. This week the index established the 17,400 level as solid near-term support.

The S&P 500 Index (SPX) gained 0.7% this week and closed at 2,091.54. The large-cap index stayed above its 200-day moving average, while establishing near-term support around 2,080. Below that is the 200-day moving average, which ended the week at 2,076.54.

None of the nine S&P Select Sector SPDR ETFs posted a loss this week. However, the Consumer Stables Sector (XLP) ended the week unchanged. As oil rebounded from six-and-a-half-year lows, the Energy Sector (XLE) enjoyed a rare leadership week, rising 3.45%. The technology sector (XLK) was up 0.69% for the week.

The broad market Wilshire 5000 (W5000) climbed 0.72% this week and regained the 22,000 level, closing at 22,009.76. The index tested its 200-day moving average multiple times throughout the week, but it held.

The tech-laden Nasdaq Composite (COMP) ticked upward by 0.1% this week to 5,048.24. Near-term support around the 5,025 to 5,000 level appears to be gaining strength.

The Russell 2000 (RUT) index gained 0.48% this week to 1,212.69. We continue to look for initial support around the 1,200 level.

The CBOE Volatility Index (VIX) lost 4.2% this week and closed at 12.83, below both its 10- and 20-day moving averages.

Earnings Announcements & Tech News

Here are earnings announcements and news from the companies that provide the equipment, websites or services that the staff and editors of Computerized Investing use or follow (consensus estimates are from I/B/E/S):

  • Alibaba (BABA) reported earnings of $0.59 per share, 1.7% above the consensus estimate of $0.58.
  • Cisco Systems (CSCO) reported earnings of $0.59 per share, 4.8% above the consensus estimate of $0.563.
  • King Digital (KING) reported earnings of $0.49 per share, 14.2% above the consensus estimate of $0.429.

Shares of Apple Inc. fell 5.2% on Tuesday on the news that the People’s Bank of China devalued the Chinese yuan. A weaker yuan could hurt the competitiveness of firms outside China by making their goods and services relatively more expensive, while companies that generate sales in China could find revenue and profit generated in yuan are worth less in their home currency. China is a major market for Apple products. For the week, AAPL shares clawed out a 0.38% gain.

Global Economic News & Data

Here is a recap of this week’s key economic data and news:

Domestic

  • Federal Reserve Vice Chairman Stanley Fischer emphasized this week that U.S. inflation remains low and Fed officials must see inflation returning to more normal levels before the central bank raises interest rates.
  • In contrast, Atlanta Fed President Dennis Lockhart noted that economic conditions in the United States have largely returned to normal, and the time for an interest rate hike may be near.  He added that the economy is near full employment.
  • The Labor Department's monthly Job Openings and Labor Turnover Survey (JOLTS) showed the number of unemployed job seekers per open job fell to 1.58, the lowest since August 2007. The ratio was at 1.62 in May. The quit rate, which is seen as a measure of confidence in the jobs market, held at 1.9% for a third straight month. The JOLTS report showed a modest rise in the pace of layoffs in June, with the layoffs and discharges rate rising to 1.3% from 1.2% in May.
  • The Commerce Department said retail sales rose 0.6% last month, broadly in line with economists' expectations, and were unchanged in June, an upward revision from the previously reported 0.3% drop. May's data was also revised higher. Sales last month rose in most categories, with receipts at auto dealerships increasing 1.4% after falling 1.5% in June. Excluding automobiles, gasoline, building materials and food services, retail sales rose 0.3% after a revised 0.2% gain in June. These so-called core retail sales, were previously reported to have dipped 0.1% in June.
  • Initial jobless claims, a proxy for layoffs, increased by 5,000 to a seasonally adjusted 274,000 in the week ended August 8, the Labor Department reported. Economists surveyed by The Wall Street Journal had forecast 270,000 new applications for jobless benefits last week. The level of claims for the August 1 week was revised down by 1,000 to 269,000. The four-week moving average of claims fell by 1,750 last week to 266,250. That marks the lowest level since April 2000.
  • Import prices decreased 0.9% in July from a month earlier, the Labor Department reported. From a year earlier, import prices are down 10.4%. July’s decrease was led by falling oil prices. The cost of imported petroleum fell 5.9% last month from June and is down 43.4% from a year earlier. Outside petroleum, import prices were down 0.3% last month and 2.8% from a year earlier. That is the largest year-over-year decline in the measure since October 2009.
  • The U.S. producer-price index rose 0.2% in July after climbing 0.4% in June. Economists surveyed by The Wall Street Journal had expected an increase of 0.1%.

International

  • China’s government announced on Sunday that factory prices in July extended more than three years of declines. Exports in July slid 8.3% from a year earlier, reversing a gain of 2.8% in June. Imports fell for the ninth month in a row, dropping 8.1%, after a decline of 6.1% in June.
  • Following the release of the export data, the People’s Bank of China devalued the country’s currency.
  • Greece and international creditors sought to put final touches to a multi-billion euro bailout accord to keep the country financially afloat and meet an important debt repayment to the European Central Bank (ECB). Germany set out "strict" conditions for further aid and said it would be sensible to link the size of the first tranche to Greece's progress in carrying out reforms, a reflection of worry around the euro zone that Athens might not do as promised. An accord for up to 86 billion euros ($94 billion) in fresh loans to Greece must be in place by August 20, when the repayment to the ECB is due.

Computerized Investing Market Dashboard Indicators

The iShares Dow Jones U.S. Index Fund (IYY) was up 0.67% and closed at $105.50

The ETF tested its 200-day moving average on an intraday basis on Wednesday but it held. We continue to look at that moving average, which closed the week at 104.13, as near-term support.

This week, no Market Dashboard indicators changed signals. However, there was one confirming bullish signal for the week.

Market Dashboard indicators worth discussing this week are:

  • The iShares Dow Jones U.S. Index Fund (IYY) added 0.67% this week to close at $105.50. This indicator remains bearish. Earlier in the week the ETF was able to move above its 100-day moving average but was able to remain there. The 100-day moving average of IYY's closing price ticked downward to $105.70 from last week’s $105.71. The spread between the IYY closing price and the moving average is now -0.19%, down from -0.86% at the end of last week.
  • The MACD of IYY closed the week below its signal line, so the indicator remains bearish. The MACD of IYY stands at -0.130, while the signal line is at -0.088.
  • The Percentage of NYSE Stocks Above 50-day Moving Average closed the week at 37.27, up from last week’s reading of 32.43. This indicator is still bullish. If there are no confirming bullish signals, or if there is not a new bearish signal before January 29, 2016, this indicator will go “stale” and will revert to neutral.
  • The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation remained bearish. This indicator actually consists of two indicators, and they are both flashing bearish signals this week, which is why the overall signal is bearish. The first indicator used by the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the Nasdaq Summation Index ($NASI) and its five-day exponential moving average. The $NASI ended the week below the moving average, making this indicator bearish. $NASI ended the week at -543.13, versus the moving average at -519.44. The second indicator used for the NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator is the MACD of $NASI. The MACD line closed the week below the signal line, making this indicator bearish. The MACD of $NASI is -97.003, while the signal line is -91.311.
  • The AAII Investor Bullish Sentiment reading gained 6.13 percentage points this week to 30.45%. By rising back above the 25% bullish threshold level, this indicator triggered a confirming bullish signal. If this indicator does not trigger another confirming bullish signal, or trigger a new bearish signal by rising above the 50% level and then fell back below it, the signal will go “stale: and revert to neutral on February 12, 2016.

For the week ending August 14, two CI Market Dashboard indicators are bullish, four are neutral and three are bearish.

 

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8/7/2015

Author: Wayne A. Thorp, CFA

Week in Review

Worries of a slowing global economy came to the forefront again this week, driving oil prices lower and rattling investors around the world. Here at home, many investors waited all week for the government’s employment report for July. That data could go a long way toward determining whether the Federal Open Market Committee raises interest rates at its next meeting in September.

Monday

A sharp decline in crude-oil futures on Monday pulled U.S. stocks lower to start the month. Traders worry that global demand will not increase enough to mop up the oil being produced. Fueling concerns was data showing a decline in Chinese factory-floor activity to a two–year low and a decline in the U.S. manufacturing purchasing managers’ index.

Following Monday’s 4.1% decline, crude-oil futures are down more than 50% in the last year. Not surprisingly, energy companies in the S&P 500 were the biggest decliners in the index, falling 2%.

The Dow Jones Industrial Average fell 0.5%; the S&P 500 declined 0.3%; and the Nasdaq Composite shed 0.3%.

In Europe, the Stoxx Europe 600 rose 0.8%. Germany’s DAX gained 1.2% and France’s CAC 40 added 0.7%. But Greece’s Athex Composite index, which had been closed since June 29 as the country’s debt crisis intensified, plunged 16%. This was its biggest fall in percentage terms since at least January 1991, according to Thomson Reuters.

The CBOE Volatility Index added 3.6%, its first gain in the last five sessions.

Tuesday

Even though the Federal Open Market Committee won’t meet again until September to consider raising interest rates, interest rates still pushed U.S. stocks downward on Tuesday.  Federal Reserve Bank of Atlanta President Dennis Lockhart said the economy is ripe for a rise in short-term interest rates, spooking U.S. markets.

The Dow Jones Industrial Average fell 0.3%; the S&P 500 lost 0.2%; and the Nasdaq Composite fell 0.2%.

The Stoxx Europe 600 fell 0.2% to 398.75. Greece’s main stock index ended the day down 1.2%, recovering from heavier losses earlier in the day.

The Shanghai Composite Index closed 3.7% higher after Chinese authorities implemented measures to limit short selling by requiring investors to wait at least one day to cover their positions and pay back loans used to buy shares.

The CBOE Volatility Index edged up 3.5%.

Wednesday

U.S. stocks were mixed on Wednesday, as investors looked ahead to Friday’s jobs report, which may offer insight into the Federal Reserve’s next move on interest rates. Federal Reserve Governor Jerome Powell said that nothing has been decided on a rate move in September, and that he wants to see more data before making a decision.

The Dow Jones Industrial Average lost 0.1%, while the S&P 500 rose 0.3%, snapping its three-day losing streak. The Nasdaq Composite ended its own three-day losing streak by gaining 0.7%.

In Europe, the Stoxx Europe 600 gained 1.3%. In Greece however, stocks continued to fall.

In China, the Shanghai Composite Index closed down 1.6%.

Crude-oil futures slipped 1.3%.

The CBOE Volatility Index lost 3.8%.

Thursday

Media stocks tumbled on Thursday, reacting to Disney’s earnings report on Tuesday that included declining subscribers at ESPN and disappointing earnings and revenues from Viacom, pointing to an acceleration in consumers who are cutting the cord and switching to streaming online viewing.

That Dow Jones Industrial Average declined 0.69%, posting its sixth straight losing session. This is its longest losing streak since October, according to Schaeffer’s Investment Research. The S&P 500 fell 0.78% to close below the 2,100 mark and the Nasdaq Composite shed 1.62%.

Across the Atlantic, telegraphing by the Bank of England that it would start lifting interest rates in the U.K. early next year pushed the U.K.’s FTSE 100 down 0.1%, while the Stoxx Europe 600 lost 0.8%.

Crude-oil futures continued to slide, down 1.1% on the day.

The CBOE Volatility Index gained 10.1%.

Friday

All eyes were in the Labor Department on Friday as it reported that the U.S. labor market continued to grow as a steady rate. The solid July jobs report raised the likelihood that the Federal Reserve will increase interest rates in September for the first time since 2006. Fed officials last month said they were looking for further improvement in the labor market before making such a move.

The odds of a rate increase—based on trading in Fed-funds futures—at the September meeting were 56% Friday, compared with 46% before the jobs report and 48% Thursday, according to traders. The odds of a rate boost at the December meeting were 79%, compared with 72% before the report and 73% on Thursday. The increased likelihood of a rate increase, along with another drop in oil prices, sent U.S. stocks lower.

That Dow Jones Industrial Average declined 0.3%, rebounding from steeper losses earlier in the day. This was the seventh consecutive down day for the day, its longest losing streak in four years according to Schaeffer’s Investment Research. The S&P 500 also slid 0.3%, as did the Nasdaq Composite.

The CBOE Volatility Index fell 2.8%.

Oil prices fell more than 1%, dragging down the energy sector. The energy sector was hurt by The energy sector suffered the day’s biggest losses, losing ground as oil prices fell more than 1%. Energy stocks in the S&P 500 fell 1.9%.

Stock continued to fall in Europe. Germany’s DAX lost 0.8%, while France’s CAC 40 lost 0.7%, and the Stoxx Europe 600 index shed 0.9%.

In Asia, Japan’s Nikkei Stock Average added 0.3%, while Hong Kong’s Hang Seng Index rose 0.7%.

Weekly Market Summary

The Dow Jones Industrial Average (DJIA) dropped 1.8% this week to close at 17,373.38. The blue-chip index fell through support around the 17,400 level, so we now look to the 17,100 to 17, 300 range for support. The index is also very close to having its 50-day moving average cross below the 200-day average, a significant bearish technical signal.

The S&P 500 Index (SPX) lost 1.2% this week and closed at 2,077.57. The large-cap index once again fell below its 50-day moving average, but found support at the 200-day average line. Below that, we expect some support around the 2,040 to 2,050 level.

Only one of the nine S&P Select Sector SPDR ETFs posted a gain this week—Utilities (XLU). This is probably due to the fall in the yield on Treasury notes, making dividend-paying stocks such as utilities more attractive to investors. The freefall in oil continues, pushing the Energy Sector (XLE) down 3.44% this week. The technology sector (XLK) lost 1.08% on the week.

The broad market Wilshire 5000 (W5000) shed 1.5% this week and closed at 21,852.59. The index fell through round-number support at 22,000, but seemingly found support at its 200-day moving average. Below that, we look for support around 21,625.

The tech-laden Nasdaq Composite (COMP) surrendered 1.7% this week to 5,043.54. While the 50-day moving average failed to offer support, round-number support around the 5,000 mark did materialize.

The Russell 2000 (RUT) index of small-cap stocks dropped 2.57% this week and closed at 1,206.90. The index closed below its 200-day moving average for the first since mid-December. We look for initial support around the 1,200 level.

The CBOE Volatility Index (VIX) added 10.5% this week to 13.39.

Earnings Announcements & Tech News

Here are earnings announcements and news from the companies that provide the equipment, websites or services that the staff and editors of Computerized Investing use or follow (consensus estimates are from I/B/E/S):

  • 3D Systems (DDD) reported earnings of $0.03 per share, 200% below the consensus estimate of $0.09.
  • Bankrate (RATE) reported earnings of $0.16 per share, in line with the consensus estimate of $0.158.
  • Boingo Wireless (WIFI) reported earnings of $(0.16) per share, in line with the consensus estimate of $(0.161).
  • CenturyLink (CTL) reported earnings of $0.55 per share, 9.2% below the consensus estimate of $0.604.
  • DISH Network (DISH) reported earnings of $0.70 per share, 55.2% above the consensus estimate of $0.451.
  • Energizer (ENR) reported earnings of $0.64 per share, 29.2% above the consensus estimate of $0.495.
  • Fitbit (FIT) reported earnings of $0.21 per share, 162.5% above the consensus estimate of $0.08.
  • GoDaddy (GDDY) reported earnings of $(0.46) per share, 280.1% below the consensus estimate of $(0.121).
  • Groupon (GRPN) reported earnings of $0.02 per share, in line with the consensus estimate of $0.025.
  • NVIDIA (NVDA) reported earnings of $0.34 per share, 236.6% above the consensus estimate of $0.101.
  • Orbitz (OWW) reported earnings of $(0.04) per share, 141.7% below the consensus estimate of $0.096.
  • Overstock.com (OSTK) reported earnings of $0.07 per share, 85.7% below the consensus estimate of $0.13.
  • Priceline (PCLN) reported earnings of $12.45 per share, 3.9% above the consensus estimate of $11.982.
  • Skullcandy (SKUL) reported earnings of $0.04 per share, 60.0% above the consensus estimate of $0.025.
  • Sprint (S) reported earnings of $(0.01) per share, 760.0% above the consensus estimate of $(0.086).
  • Time Warner (TWX) reported earnings of $1.25 per share, 21.8% above the consensus estimate of $1.026.
  • Viacom (VIAB) reported earnings of $1.47 per share, in line with the consensus estimate of $1.471.
  • ZAGG (ZAGG) reported earnings of $0.12 per share, 76.5% above the consensus estimate of $0.068.
  • Zillow (Z) reported earnings of $(0.01) per share, 2,430.0% above the consensus estimate of $(0.253).
  • Zynga (ZNGA) reported earnings of $(0.01) per share, 100% above the consensus estimate of $(0.02).

Amazon.com, Inc. (AMZN) has implemented changes to its Prime service, in what looks like an attempt to crack down on sharing benefits with extended family members and friends. Over the weekend, Amazon made several changes to its “Amazon Household” program and the ability for Prime members to share their shipping benefits. The changes are designed to limit the ability for customers to share Amazon Prime subscriptions with those who are not actually members of their immediate family.

Previously, Amazon Prime subscribers were able to share shipping benefits with up to four other “household” members. But with a change to its policies at the end of July, Amazon now only allows a Prime member to share their Prime benefits with one other adult. Now, two adults can now share their Prime benefits, which include the free, two-day shipping, Prime Instant Video streaming, access to Kindle Owners’ Lending Library, Prime Early Access and Prime Exclusive deals.

At first, Amazon didn’t make an official announcement about the changes to Prime benefit sharing. However, as word spread throughout the blogosphere and social media, Amazon offered this comment:

“We are excited to allow Prime members to share more benefits within their household. This was always our intention, and the new Amazon Households Program allows a family unlimited access to Prime Instant Video so they can share access to videos included with Prime. It also allows households to create a shared library of ebooks, audiobooks, apps and games across all of Amazon devices and media apps, in addition to sharing shipping benefits and more. The Amazon Households program includes two adult family members and four children.”

On Monday, Apple Inc. (AAPL) shares dropped below its 200-day moving average, the first time since 2013, according to TheStreet.com. On Tuesday, more than 120 million AAPL shares were traded, the highest volume since January, according to Bloomberg, as Apple entered a correction and hit a six-month low. After reaching a split-adjusted all-time intraday high of $134.54 on April 28, the stock is down more than 14%. However, the stock seems to have found some footing around $112.50, which had served as resistance in December in January.

Global Economic News & Data

Here is a recap of this week’s key economic data and news:

Domestic

  • Spending on U.S. construction projects rose 0.1% in June, whereas economists polled by MarketWatch had expected a 0.8% increase. However, the increase in spending in May was revised up to 1.8% from 0.9%. The Commerce Department said construction outlays increased to an annual rate of $1.06 billion in June, adjusted for seasonal variations. Spending advanced 0.4% for new houses, condos, apartment buildings and other residential properties. Outlays on nonresidential and commercial projects was flat.
  • U.S. manufacturers expanded at a slower pace in July, according to a survey released Monday by the Institute for Supply Management (ISM). The ISM’s manufacturing purchasing managers index fell to 52.7 in July from 53.5 in June. A reading above 50 indicates that the manufacturing economy is generally expanding. This marked the 31st consecutive month of expansion. The ISM new orders index increased to 56.5 last month from 56 in June. The new orders component of the index, now up for four straight months, is often viewed as a leading indicator of activity. The ISM production index climbed to 56 from 54. The employment index decreased to 52.7 in July from 55.5 in June. The ISM exports index dropped to 48 from 49.5.
  • The final U.S. purchasing managers’ index compiled by data provider Markit ticked up to a seasonally adjusted 53.8 in July from a final June reading of 53.6.
  • Personal spending rose 0.2% in June from a month earlier, the smal