ChartTrader – Downside Participation Expands, SPY Breaks, QQQ Holds, Yields Rise, SOXX Joins ITB and XRT (Premium)

Weakness is spreading as the 10-yr Treasury Yield rises above 4.5%. Even though the rise is not that sharp, the market is re-pricing interest rate expectations going forward. This is especially visible in the Consumer Discretionary sector and Small-caps. Selling pressure increased markedly over

The weight of the long-term evidence remains bullish, but the short-term evidence is starting to turn as the 4-wk High-Low Percent indicator combo turned bearish. I consider this strike two against the short-term bulls. Strike one was the gap down

Stocks fell on Tuesday and then recovered somewhat on Wednesday. Overall, SPY is leading the market with the strongest short-term uptrend. QQQ stalled since March 1st, but this is just a consolidation within a bigger uptrend.

The weight of the evidence is bullish for the long-term and the short-term. Long-term, the Composite Breadth Model is positive. Short-term, 4wk High-Low Percent for the S&P 500 and Nasdaq 100 remains net bullish, while SPY and QQQ continue to stair-step higher.

The first chart shows 4wk High-Low Percent for the S&P 500, Nasdaq 100, S&P MidCap 400 and S&P SmallCap 600. There is a detailed explanation below the chart. This SPX/NDX combo turned bullish on November 2nd

The weight of the evidence remains bullish for stocks, both long-term and short-term. Some groups within the Nasdaq 100 corrected over the last two months. S&P 500 stocks picked up this slack as 52-week highs

The bull run continues with the S&P 500 SPDR (SPY) surging 2% the last three days and hitting another new high. Four of the eleven sectors hit new high (Finance, Industrials, Communication Services and Materials). We also saw new highs in several economically sensitive groups: Home Construction ETF (ITB), Retail SPDR (XRT)

The weight of the evidence remains bullish for stocks, but I continue to see sizable pockets of short-term and medium-term weakness. Upside participation within the Nasdaq 100 and S&P SmallCap 600 is deteriorating. The S&P 500 is still holding strong and the 4wk High-Low Percent combo

The first chart below shows the 4-wk High-Low Percent indicators for the S&P 500, Nasdaq 100, S&P MidCap 400 and S&P SmallCap 600. I explain the indicator and signals below the chart. This indicator combo turned bullish on November 2nd

Some tech stocks stumbled over the last few weeks, but other parts of the market picked up the slack. The chart below shows the percentage of stocks above their 50-day SMAs for the S&P 500, Nasdaq 100, S&P MidCap 400 and S&P SmallCap 600. This indicator

We remain in a bull market and the short-term trends are up for the major index ETFs. I am seeing weakness within the Nasdaq 100 and S&P SmallCap 600, but improvements within the S&P 500 and S&P MidCap 400. Today’s report will then look at 4-week High-Low Percent for the major index ETFs.

We are in a bull market, but the stock market is not firing on all cylinders in 2024. Overall, the weight of the evidence remains bullish because most cylinders are firing and supporting the uptrends. Note that the S&P MidCap 400 SPDR (MDY) and S&P 500 EW ETF (RSP) closed at new highs on Monday.

The short-term uptrend remains intact for SPY. The first chart updates SPX %Above 50-day SMA and SPX 4-week High-Low Percent. Over 90% of S&P 500 stocks were above their 50-day SMAs in early January and only 64% are above here in late February (mustard arrow). Fewer stocks are participating

Long-term, the weight of the evidence remains bullish. The chart below shows the bullish sequence starting with the Zweig Breadth Thrust on November 3rd. See the ZBT1500 Thrust in the middle window and the green arrows on the price

Stocks fell back this week with declines over the last two days, but the futures are pointing to a sharply higher open after Nvidia exceeded expectations. Once again, pullbacks are very short-lived as the market quickly rebounds

We are in a bull market, but some indicators are still pointing to a corrective period and a correction may have started last week. First, fewer stocks made it back above their 50-day SMAs as SPY moved higher in the first half of February. Second, seasonal patterns turned negative last week (mid February). Thinking in tornado terms, a tornado

Fewer stocks are partaking in the current advance, but SPY remains in a short-term uptrend and 4wk High-Low Percent is bullish. The chart below shows SPY moving higher

We are in a bull market, but evidence is pointing to a corrective period and a correction could begin this week. Warning signs appeared over the last few weeks as fewer stocks made it back above their 20-day SMAs this month. Seasonal patterns are also

There is no change in the overall market environment. The weight of the evidence remains bullish, but the stars are aligning for a correction. SPY and QQQ are overbought. Breadth is deteriorating within the S&P 500. Small-caps and mid-caps are weak with

The weight of the evidence remains bullish, but the stars are aligning for a correction. SPY and QQQ are overbought. Breadth is deteriorating within the S&P 500. Small-caps and mid-caps are weak with MDY and IWM forging lower highs from December to February. Seasonally, February is one of the weakest months of the year.