While spring break season is underway and you may be more focused on getting to the beach or working on your short game, let’s start the week with a review my key market models and indicators. Remember, the primary goal of this exercise (something I actually do on a daily basis) is to remove any preconceived, subjective notions about the markets and ensure that I stay in line what “is” really happening in the market.

The State of the Trend

We start each week with a look at the “state of the trend” from our objective indicator panel. These indicators are designed to give us a feel for the overall health of the current short- and intermediate-term trend models.

Executive Summary:

  • The short-term Trend Model is technically positive – but only by a smidge
  • A break below 2354 by mid-week would turn the Short-Term Channel Breakout system negative
  • The Intermediate-Term Trend model is still very positive
  • The intermediate-term Channel Breakout system sell point currently stands at 2335 but is currently trending upward and will be at 2350 by late this week
  • The Long-Term Trend model remains positive
  • The Cycle Composite is negative for the next week and projects a see-saw decline into mid-April
  • The Trading Mode models still say this is a trending market

    • The State of Internal Momentum

    Now we turn to the momentum indicators…

    Executive Summary:

  • The short-term Trend & Breadth models are technically positive, but barely so. Also, I will note that since 2011, a positive reading has actually produced a return of -2.32% annualized as this remains one of the traditionally solid indicators that has been negatively impacted by the advancement of high speed trading and the proliferation of ETFs.
  • The intermediate-term Trend & Breadth model is still solidly positive – a good sign
  • No change in the Industry Health Model. This indicator should be viewed as moderately positive from a big-picture standpoint
  • The short-term Volume Relationship indicators is back in positive mode – but only modestly so
  • From a long-term perspective, the demand/supply relationship of volume is in good shape
  • The Price-Thrust indicator is on the edge of neutral – so this is not as negative as it may appear
  • The Volume Thrust indicator is moving from negative to neutral is a positive development – note that the historical return is pretty strong for a neutral reading
  • While the Breadth Thrust indicator is technically neutral, the market’s historical return when in mode is very strong – so we will color it green
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