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The March Continues, Tho . . . August 13, 2016

Posted by Tom in Thoughts.
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Aug. 12, 2016 – This market continues to march forward, though there are some minor signs of at least some slowing slowing.  The McClellan Summation Index (shown below), which is the cumulative sum of advancing vs. declining stocks, is trending down (circled in purple).  This indicates that fewer stocks are advancing and the market advance has narrowing participation.

Summation

Does this mean the market must fall?  No, and the McClellan Summation Index can drop for awhile before any price weakness begins, but this does show that structural weakness is beginning. (click on chart to enlarge)  I’ve drawn a few narrow trend line channels and spotted in a Bollinger Band to add to the analysis.  The gray line is the S&P 500 Index for reference.

The chart of the NASDAQ Composite (below) continues to weigh on me.  The daily bars (range) is tight, volume is low and Market Sentiment is now Neutral.  Just another “yellow flag” in here.

NASDAQ

It’s good to be back on my home computer with a big screen; makes graphic editing much easier.  So, here are a few more areas to cover:

First the percent of stocks in the broad S&P 1500 Index that are in an Accumulation (buying) phase; nearly half of them.

SP 1500 A-D

Next the price strength of all stocks in the S&P 1500 Index; roughly a third of them:

SP1500 Price Strength

This looks relatively “healthy” in that things are not majorly imbalanced (i.e. over bought or over sold).   A positive.

Next let’s see what areas (sectors) are doing well:

Major Sectors

We note that over the past 6 weeks, Technology, Consumer Discretionary and Healthcare are doing well.  When you drill down that is focused on Software, Semiconductors, Internet, select Retail and Biotech stocks.   I should also note that emerging markets and European stocks are recovering as well.  The chart below shows the sectors and amounts of stocks that are on my “radar” as being strong.

Top Sectors

So that’s it for now.  Hopefully I am covering areas of interest for you; it’s always good to get feedback though.  Fell free to comment (but I can’t give specific security recommendations).  Also add this blog to your RSS subscription to be notified when content changes (just click on the orange RSS icon).

Bottom line is (for now) I’m invested, but remain cautious.  Signs of weakness maybe slowly developing.  Likely any correction we get will be short and shallow, but we’re due for a breather here.  Have a good week.       ………. Tom ……..

charts by TC200.com; MetaStock; pie charts by http://www.HighGrowthStock.com.  Used with permission.

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