Technical Market Report For March 4, 2017

The good news is:

• All of the major averages hit all time highs last Wednesday.

The Negatives

The breadth indicators weakened a little over the past week.

The secondaries continue to under perform the blue chips.

After hitting an all time high on Wednesday the Russell 2000 (R2K) closed down for the week.

The first chart covers the past 6 months showing the NASDAQ composite (OTC) in blue and a 10% trend (19 day EMA) of NASDAQ new highs (OTC NH) in green. Dashed vertical lines have been drawn on the 1st trading day of each month.

OTC NH failed to confirm the new index high by a wide margin.

The next chart is similar to the one above except it shows the S&P 500 (SPX) in red and NY NH, in green, has been calculated with NYSE data.

NY NH is a little stronger than OTC NH, but still failed to confirm the new index high by a wide margin.

The next chart is from FastTrack. It covers the past year showing the R2K in red and the SPX in green on log scales. Accutrack (AT), plotted as a histogram at the bottom in yellow is a relative strength indicator. When AT is above the neutral line the R2K is outperforming the SPX and that is good.

Since late January the R2K has been underperforming the SPX; that is not good.

The Positives

New highs have continued to outnumber new lows by wide margins.

The next chart covers the past 6 months showing the OTC in blue and a 40% trend (4 day EMA) of NASDAQ new highs divided by new highs + new lows (OTC HL Ratio), in red. Dashed horizontal lines have been drawn at 10% levels for the indicator; the line is solid at the 50%, neutral, level.

OTC HL Ratio fell again last week, but, finished the week at a respectable 75%.

The next chart is similar to the one above one except it shows the SPX in red and NY HL Ratio, in blue, has been calculated from NYSE data.

NY HL Ratio also fell, finishing the week at a respectable 77%.

Seasonality

Next week includes the 5 trading days prior to the 2nd Friday of March during the 1st year of the Presidential Cycle. The tables below show the daily change, on a percentage basis for that period.