Risk gauge remains 100% positive despite the sell-off as the initial strength after the election seems to be holding. (+)
The 1-month vs 3-month volatility retraced a bit but still in positive territory. (+)
On a longer-term basis, the color charts that measure the % of stocks above kwy moving averages remain positive for the small caps. (+)
The Dollar continued its ascent this week against the Euro with markets reverting to their historical relationship. It is in overbought condition and subject to mean reversion. (+)
Bitcoin exploded to new all-time highs, held its gains, and seemed unphased by the sell-off in equities. (+)
Despite the nasty sell-off on Friday, Growth stocks continue to outperform value based on our Triple Play leadership indicator and both remain in a bull phase. (+)
Neutral
A mixed picture regarding the modern family with a massive breakdown in biotech and an important breakdown in both price and leadership as measured by our Triple Play indicator in Biotech and Semiconductors. Meanwhile, Regional Banks (KRE) and Transports (IYT) held up well despite the late week sell-off. (=)
The Nasdaq is giving a mixed read on the color charts. (=)
Gold broke its longer-term trendline but is extremely oversold on both price and real motion. (=)
All four major indexes sold off hard this week (-1.4% to -4.1%) which was not surprising as we highlighted considering how overbought they were at the close of last week. Market action will reveal if this is mean reversion or cyclical top in the market. (=)
Only Energy and Regional banks out of the 14 sectors we track were up on the week while there were some major selloffs in Biotech (IBB) and semiconductors (SMH), both risk-on sectors. (-)
DBA (Agriculture) was up 2% on the week indicating inflationary pressure. (-)
For NYSE and Nasdaq, McClellan Oscillator and up/down volume reversed its positive read with the selloff over the last couple days. Additionally, the cumulative advance/decline line for the NYSE has a potential double top in play while they are still weaker for the Nasdaq composite sitting on multiyear lows. (-)
The two key moving averages on the New High New Low ratio flipped negative. (-)
Interest rates look under pressure on all ends of the yield curve. With inflation pressures still persisting, the likelihood of another rate drop has diminished. (-)
Foreign equities, both in emerging markets and more established, took it on the chin and got their ear bit off. (-)
Dr Copper also got hit this week, closing in a distribution phase. Not a good sign for the overall economy. (-)
Based on our color charts and the number of stocks above key moving averages, the SPY is bearish across all time-frames. (-)
