Above The 40 – Stock Market Returns To Regularly Scheduled Programming

AT40 = 46.5% of stocks are trading above their respective 40-day moving averages (DMAs)
AT200 = 61.8% of stocks are trading above their respective 200DMAs
VIX = 11.3 (volatility index)
Short-term Trading Call: neutral

Commentary
In my last Above the 40, I pointed out a surprising and mild bullish divergence. Like so much else in this market, follow-through failed to materialize on Monday. SPY Financials under-performed with a 0.7% loss for the Financial Select Sector SPDR ETF (XLF) that set a new 5-week low, confirmed the end of the bullish March 1st breakout, put into play support at the 50-day moving average (DMA), AND now threatens to erase the big breakout from mid-February. AT40 (T2108) quickly returned to its weak showing. Its drop from 50.3% to 46.5% underlined the stock market’s desire to return to its regularly scheduled program of technical “droopiness.”

The S&P 500 finished the reversal of last week’s post-Fed celebration.

The Financial Select Sector SPDR ETF has gotten a lot heavier as the lower-Bollinger Bands (BBs) open up and point downward.

The volatility index, the VIX, still sits in extreme lows. Its day-to-day moves provide few clues. If trouble descends upon this market anytime soon, the angst will likely be sharp, sudden, and abrupt.

The volatility index is stuck in the muck of extremely low volatility.

While the stock market reminded me again of the wobbly technical underpinnings, there were some notable gainers on the day. One of the more notable was NVIDIA (NVDA). The stock broke out above its 50DMA resistance in a very bullish move that firmly vindicated Goldman Sachs (GS) on its move to reiterate its call on NVDA. Look out if NVDA hurdles $112; that level was the scene of NVDA’s last top which hit right at its 20DMA at the time.

Buying volume in Nvidia stayed strong as the stock surged above 50DMA resistance.

Snap Inc. (SNAP) once again demonstrated the importance of analyst commentary for a young stock. After 12 days of trading, a brave analyst FINALLY came out with a buy recommendation on SNAP. From Barron’s: