The next report will be on Thursday, February 20th.
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.
The weight of the evidence continues to support a bull market in stocks. All three major index ETFs are in long-term uptrends and all nine breadth indicators are on bull signals (%Above 200-day SMA, %Above 150-day SMA, High-Low Percent).
The breadth indicators weakened into January as the market corrected, but then rebounded into February with Nasdaq 100 breadth leading the way. S&P 1500 breadth remains the weakest of the three (blame small-caps and mid-caps).
The junk bond yield spread remains at narrow levels so there are no signs of stress in the credit markets. Short-term rates remain in a downtrend and the Fed has yet to turn hawkish.
This week’s big shift if the breakout in the 7-10 Yr Treasury Bond ETF (IEF) and the break down in the 10-yr Treasury Yield. IEF is now in an uptrend, while the 10yr yield is in a downtrend. Lower rates may seem positive for stocks, but long-term rates are usually tied to economic growth and inflation. Thus, lower yields point to lower inflation or lower growth or both.
If viewing this PDF in a browser, right click on the
chart to open as a new tab or window.
Use CRTL and the Plus or Minus keys (+ -) to zoom.
Video Headlines
- The long-term evidence remains bullish for stocks (bull market).
- SPY, QQQ and RSP in long-term uptrends (Bollinger Band signals).
- SPX, NDX and S&P 1500 breadth indicators are long-term bullish.
- SPX %Above 200-day and %Above 150-day indicators are strong enough
- NDX breadth leads with strongest readings overall
- S&P 1500 breadth is the weakest because of small-mid cap performance.
- The Junk bond spread shows no stress in credit markets.
- The Fed went on hold, but has yet to turn hawkish.
- The 10-yr Yield broke down as IEF broke out.