The next report will be on Thursday, February 13th.
The long-term trends are up for the major index ETFs and their respective breadth indicators are net bullish. The junk bond yield spread remains narrow and shows now signs of stress in the credit markets. Thus, we are still in a bull market.
Medium-term, we are starting to see some signs of weakness in breadth and the 10-yr Treasury Yield renewed its push towards 5%. The long-term breadth indicators were hit hard in December and rebounded in January. This rebound, however, was not very strong as the High-Low Percent indicators for the S&P 1500 and S&P 500 did not get back above 10% (fewer new highs). In addition, the percentage of stocks above their 200-day and 150-day SMAs barely made it back above 60%. I am marking the 50% levels on these indicators. Breaks below 50% would indicate that downside participation is broadening and this would increase the chances for a correction in the stock market. Perhaps a 5-8 percent decline in SPY.
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Video Headlines
– Long-term evidence remains bullish for stocks
– SPY, QQQ and RSP are in long-term uptrends
– RSP did not exceed its upper BBand
– Nasdaq 100 Breadth is Net Bullish
– S&P 1500 and S&P 500 Breadth are Net Bullish
– Watch 50% on the %Above 200/150 day indicators
– Junk bond spread remains near its lows
– Fed on hold, but yet to turn hawkish
– 10-yr Yield broke out of falling wedge