Nasdaq Composite
We continue to be unimpressed with broad market participation when we see rallies within the current trading range. The new high on the NASDAQ 100 was not confirmed by a similar new high on the NASDAQ Composite. While NASDAQ 100 has hugged the upper-band of its 2016 trend channel, the NASDAQ Composite has fallen below its 50-day average. In doing so, the Composite joins nearly two-thirds of its constituents that are also below their 50-day averages. It is not shown here, but the number of stocks on both the NASDAQ and the NYSE making new 52-week lows continues to creep higher.
Dow Transports
The improvement seen on both an absolute and relative price basis for the Dow Transports just a month ago has not produced any meaningful follow through. While it is too early (from our perspective) to conclude this was a false breakout, the clock does appear to be ticking.
Banks/Financials
The Bank Index has moved to a new year-to-date high on both an absolute basis and relative to the S&P 500. Particularly encouraging has been the breakout above the rising trend line that for most of 2015 provided support but for the first three-quarters of 2016 was meaningful resistance. This absolute price breakout has coincided with a break above a year-long relative price down-trend.
Industrials Sector
The Industrials sector has been in the relative strength leadership group (based on our RS rankings) for 31 of the past 37 weeks. It is now facing important tests of support on both an absolute and relative price basis. This comes as momentum is trending lower and breadth appears to be faltering.
Thanks for reading.
Twitter: @WillieDelwiche
Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
