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Technical Market Indicators
Dow Theory, W.D. Gann, MetaStock, system tester, indicator builder, custom formulas, momentum, overbought, oversold, buy, sell, signals, top, bottom, Bull, Bear, consolidation, sentiment, contrary opinion
October 15, 2018
U. S. stock market: indicators tilted more to the bearish side as stock prices fell.
Preview from my weekly report*
U. S. stock market indexes turned bearish for the short term after peaking on 10/3/2018.
Numerous divergences and non-conformations offered warnings for months.
Bullish momentum actually peaked in January, 2018.
Seasonal tendencies currently appear somewhat bullish, although these tendencies have not been very reliable this year.
Sentiment appears significantly oversold.
It is common for short-term trends to change frequently and with little warning.
The medium-term trend indicators tilted more to the bearish side as stock prices fell.
Stock valuations have been stretched, according to the fundamental consensus.
Long-term trends are being questioned. Note that long-term trends can be confirmed only after a time lag and a substantial price decline.
Capital Markets, Materials, Transportation, Industrial, Homebuilders, SmallCap Growth, and Financial stocks were weakest, falling 5%-7% last week.
Foreign stocks remain bearish, but the Brazil ETF (EWZ) has been exceptionally strong since 9/13/2018.
Small Cap and MidCap stocks continued to underperform.
Medium-term U.S. stock sector rotation sent a clear message, with no sectors now systematically bullish, 8 sectors neutral, and 1 sector (Materials) systematically bearish.
Health Care, Utilities, and Energy demonstrated the least weakness, while Materials, Financial, and Consumer Discretionary underperformed the most over recent weeks.
Crude oil pulled back sharply from a new 3-year high set on 10/3/2018 but still may be in a medium-term bullish trend.
Energy stocks encountered resistance, as we expected, falling 5% after rising to test 3-year highs the previous week. The Energy stock sector turned systematically neutral.
Agriculture and Metals (Gold, Silver, and Copper) gained strength and are no longer systematically bearish.
Fixed-income U.S. Bonds remain bearish.
The full report offers clear and unbiased guidance on the following each week:
� Global stock markets
� The Defensive stock sectors
� The Health Care sector
� The Cyclical sectors
� The Technology sector
� The Financials sector
� U.S. bonds and notes
� Commodities (Oil, Metals, Agriculture)
� Objective Quantitative Rankings for hundreds of Exchange Traded Funds
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Analysis of market forces may offer a sense of probabilities. But the many variables that can impact market prices are notoriously difficult to predict. And, market analysis is something less than an exact science. So, sound trading tactics are always recommended. See my Money Management Rules.
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