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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
April 15, 2019
Stock market bullish momentum persists--but stocks now are even more overbought.
Preview from my weekly report*
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The S&P 500 rose 0.51% last week to its highest price level since 10/4/2018.
Bullish momentum (RSI and MACD) is less than in February, however, thereby demonstrating bearish momentum divergence.
The SmallCap (IWM) stock price index ETF peaked on 2/25/19 and is continuing its bearish divergence compared to the LargeCap (SPY) ETF.
The percentage of S&P 500 stocks above 50-day SMAs is 81%, versus 92% on 3/1/19.
The percentage above 200-day SMAs is 71%, its highest level since 9/21/2018.
Sentiment indicators are even more extremely overbought.
Historically, seasonal tendencies have been mostly bullish for April.
Long-term U.S. stock sector rotation is giving a mixed message: the defensive Real Estate and Utilities still are leading, but the more cyclical Technology and Industrial sectors also are showing strength.
Meanwhile, the following sectors remain relatively weak for the long term: Energy, Financial, Materials, and Communication Services.
The U.S. Dollar reversed to the downside last week but remains systematically bullish. Global investors prefer the U.S. Dollar when they lack confidence in the global economy.
Gold (GLD) has sagged lower since peaking on 2/19/2019 and remains no better than neutral. Silver (SLV) is weaker than gold and is leading the way to lower prices.
Crude Oil (USO) continued its 3-month price recovery last week. Oil is very overbought for the short term and remains systematically neutral for the long term.
U.S. Treasury bond prices fell last week but remain systematically bullish for the long term. Downside technical corrections are normal during bullish trends.
$VIX Volatility Index is even more overbought . It fell to 11.95 on 4/12/19, which was the lowest level since 10/5/2018, near the peak of stock prices. Fear in the stock market has been absent this year, while bullish complacency has dominated. Extremely low Implied Volatility has preceded every past financial market dislocation. Precise pinpoint market timing is not included with this indicator, however.
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)
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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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