Technical Market Report

The good news is:

The Russell 2000 (R2K), Nasdaq composite (OTC) and the S&P 500 (SPX) all closed at all-time highs last Friday.

??The Negatives

New highs failed to confirm the new all-time index highs.

Volume is at its lowest level in more than a year.

The first chart covers the past 6 months showing the 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 turned sharply upward last week but is far from confirming the new index high.

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

NY NH also moved sharply upward but also failed to confirm the new index high.

The Positives

There was a significant shift in the breadth indicators last week. New highs expanded while new lows declined to non-threatening levels.

The next chart covers the past 6 months showing the OTC in blue and a 10% trend of Nasdaq new lows (OTC NL) in brown. OTC NL has been plotted on an inverted Y axis so diminishing new lows move the indicator upward (up is good).

OTC NL moved sharply upward last week indicating a short-term bottom occurred about a week earlier.

The next chart is similar to the one above except it shows the SPX in red and NY NL has been calculated with NYSE data.

The image of NY NL is not as dramatic as OTC NL, but the pattern is essentially the same.

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 moved sharply upward last week.