Technical Stock Market Report

The good news is:  The S&P500 (SPX) closed at an all-time high Friday.

The negatives:  New highs picked up a little last week, but, considering the major indices are at or near their all-time highs they remain anemic.  This implies a narrowing of leadership.

The chart below covers the past 6 months showing the S&P500 (SPX) in red and a 10% trend (19 day EMA) of NYSE new highs (NY NH), in green.  Dashed vertical lines have been drawn on the 1st trading day of each month.

NY NH is near its low of the past 6 months while the SPX is at an all-time high.

The next chart is similar to the one above except is shows the NASDAQ composite (OTC) in blue and OTC NH, in green, has been calculated from NASDAQ data.

OTC NH is also near a 6 month low while the index is less than 1% off its all-time high.

The Positives

Last week, new lows retreated from their elevated levels of the previous week and, of course, all time index highs are a positive.

The next chart covers the past 6 months showing the SPX in red and a 40% trend (4 day EMA) of NYSE new highs divided by new highs + new lows (NY HL Ratio), in blue.  Dashed horizontal lines have been drawn at 10% levels for the indicator, the line is solid at 50%, neutral level.

NY HL Ratio rallied to finish the week at a positive 73%.

The chart below is similar to the one above except it shows the OTC in blue and OTC HL Ratio, in red has been calculated from NASDAQ data.

OTC HL Ratio also rallied to finish the week at a comfortably positive 71%.

Money supply (M2)

The money supply chart was provided by Gordon Harms.

Money supply growth leveled off last week.

Conclusion

The recent period of weakness appears to have ended…and there are still two months of seasonal strength remaining.

I expect the major averages to be higher on Friday May 22 than they were on Friday May 15.

Last week’s negative forecast was a miss.

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Disclaimer: Charts and figures presented herein are believed to be reliable but I cannot attest to their accuracy.  Recent (last 10-15 yrs.) data has been supplied by CSI (csidata.com), FastTrack (fasttrack.net), Quotes Plus and the Wall Street Journal (wsj.com).  Historical data is from Barron's and ISI price books.  The views expressed dare provided for information purposes only and should not be construed in any way as investment advice.  Furthermore, the opinions expressed may change without notice.

Courtesy of http://www.stockmarket-ta.com/