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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
February 19, 2019
Stocks: the S&P 500 broke out above resistance--but already the market is overbought.
Preview from my weekly report*
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Short-term trends are pointing up, but the stock market is overbought.
Longer-term trends suggest a lack of confidence in global stock markets.
Of the S&P 500 stocks, 92.2% are above 50-day SMAs and appear overbought.
Meanwhile, only 61.4% of stocks are above 200-day SMAs, which is only neutral.
Sentiment rose to overbought, compared to extremely oversold in December.
Historically, seasonal tendencies have been bearish for the week ahead.
Long-term U.S. stock sector rotation appears Defensive and risk averse: Utilities, Real Estate, Health Care, and Consumer Staples are outperforming, suggesting cautious investor sentiment.
Meanwhile, economy-dependent Cyclicals, including Energy, Materials, Technology, Financial, Communication Services, Industrial, and Consumer Discretionary, are relatively weak, also suggesting cautious investor sentiment on the long-term trend.
The U.S. Dollar rose to its highest price in 8 weeks and remains bullish. Global investors prefer the U.S. Dollar when they lack confidence in the global economy.
U.S. Treasury bonds underperformed stocks last week but remain systematically bullish for the long term. Global investors prefer the U.S. bonds when they lack confidence in the global economy.
Gold (GLD) and Gold miners (GDX) resumed their short-term uptrend within their long-term bullish trends.
Energy stocks (XLE) and crude oil (USO) were notably strong last week but remain no better than neutral for the long term.
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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Weekly Rankings of Major Trend Relative Strength
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My ETF Rankings are not investment advice. Rather, they are an objective ongoing research study.
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.
According to CFTC Rule 4.41, hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.
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