31 May, 2020

US Stock Market Breadth Update. Shakeout or Not? Improvements in a Number of Indicators

Quick Links:

Timing the US Stock Market Using the Market Breadth Indicators – Introduction (0:00)
Major Market Indexes – S&P 500, Nasdaq, NYSE & S&P 600 Small Caps (0:58)
US Treasuries & Commodities – 7-10 Year US Treasuries, Gold, Crude Oil & Copper (5:13)
Sector Breadth: Percentage of Stocks Above Their 150 Day Moving Average – Relative Strength Table (7:20)
Sector Breadth: Percentage of Stocks Above Their 150 Day Moving Average – Overview Diagram (9:14)
NYSE Bullish Percent Index & Percentage of Stocks Above Their 200, 150 & 50 Day Moving Averages Charts (9:55)
IN FOCUS: US Combined Percentage of Stocks Above Their 200, 150 & 50 Day Moving Averages Charts (11:45)
NYSE Advance Decline Line Charts (16:09)
US New Highs - New Lows Charts & Momentum Index (18:36)
40 Year S&P 500 Chart Compared With Trending Higher Unemployment Rate (19:28)
NYSE Percentage of Stocks Above Their 50 Day Moving Average minus the NYSE Percentage of Stocks Above Their 200 Day Moving Average. Historical Comparisons of Extremes (21:21)

This week saw a huge shakeout in the leadership stocks with numerous tech and healthcare stocks dropping up to -20% in a just a few days from their highs. However, there is a chance that it was just a shakeout by the markets in order to let the larger players load up on the stronger stocks at a lower price. But this opinion now needs confirmation, as although some traders jumped back in immediately on the assumption of a shakeout. The price action of many stocks that got hit failed to recover with much strength, and still closed the week significantly lower than the previous week, even though they recovered half or more of the drop.

So there's a lot of leading stocks with weekly bars that have long tails. Which is a reversal pattern that shows the stock found support. But this will now need confirmation, by price making a move above last weeks high, and then a daily close above it, which should be accompanied by stronger volume.

The market breadth recovered from the weakness that I highlighted a few weeks back with the shakeout this week, and so is back on mostly short term bullish signals, with the longer term data continuing to improve

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Weekend update of the major US stock market indexes and indicators. A weekly look beneath the surface of the US stock market, featuring the key market breadth charts for timing trading stocks and the stock market indexes, such as the NYSE Bullish Percent Index, the Advance Decline Line, the New Highs - New Lows etc and some custom breadth indicators of my own in order to determine what the "Weight of Evidence" is suggesting in terms of the US stock market direction and how to allocate your money.

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