Storm Clouds And Lightning Strikes Are Rolling In Over U.S. Stocks

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Please jump right into the Big View bullets and weekly video. Due to travel there will not be Outlook commentary this week.

 

 

 

Every week we review the big picture of the market's technical condition as seen through the lens of our Big View data charts. The bullets provide a quick summary organized by conditions we see as being risk-on, risk-off, or neutral.  The video analysis dives deeper.

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Summary: Nasdaq and S&P briefly hit new all-time highs before a dramatic reversal on Thursday and Friday which could be pointing to a failed breakout and double-top. We would need to see a break-down on the weekly charts to confirm the accumulation of risk-off readings.

 

Risk On

• On the weekly charts, the key indexes remain in bull phases with positive momentum. (+)
• Foreign equities continued to outperform the U.S. since late January and extended their gains and are both sitting in strong accumulation phases. However, they are running rich according to the bollinger bands on both price and Real Motion. (+)

Neutral

• China was up over 6% on the week, going counter to the U.S. market and a dramatic outperformance. (=)
• The color charts (moving average of stocks above key moving averages) are giving neutral-to-negative readings with the exception of the Nasdaq remaining mostly positive. (=)
• Soft commodities pulled back this week, but is still leading the S&P. (=)
• Gold made new all-time highs on the week, closing near them on Friday, outperforming the broader market by a wide-margin. The relationship between Gold and U.S. equity markets are at a potential inflection point. (=)

Risk-Off

• All the key indexes were down sharply on the week (between -1.5% to -3.5%) with the Russels now down on the year -1.25%. The Dow lost its bull phase, IWM is in a distribution phase and closed under the 200-Day Moving Average. While both the Nasdaq and S&P are hanging on to bull phases but with momentum waning across the board on the daily charts. (-)
• All of the key indexes have more distribution than accumulation days with the exception of the Nasdaq which is evenly split between them. (-)
• Ten of the fourteen sectors we track were down on the week, led by retail and transports which could be pointing to a slowing economy. Consumer staples and utilities were both positive on the week, a classic flight to safety reading. (-)
• The McClellan Oscilator flipped negative with the sell-off. (-)
• The new high new low ratio rolled over this week due to weakness in the market on Thursday and Friday. (-)
• The risk gauge went full risk-off. (-)
• Unsurprisingly, volatility had a big jump closing in a bull phase for the cash index. (-)
• Value began outperforming growth and the growth index moved into a warning phase. (-)
• In the modern family, Semiconductors held onto their bull phase while regional banks and grandma retail got crushed and, along with transportation, all closed in weakened phases. Despite the relative outperformance of semiconductors, the modern family is giving risk-off signals. (-)
• Rates eased this week across the yield curve, classic behavior in a risk-off environment. (-)