Technical Stock Market Report

The good news is:  The blue chip indices and the S&P500 Mid-Cap Index closed at all-time highs last week.

The Negatives:  The blue chip indices have been hitting new highs while the secondaries are trading well off their all time highs.

The positives:  The market has come through a seasonally weak period with good strength in the breadth indicators. The secondaries while still below their all-time highs, have been outperforming the blue chips for the past several months.

The first chart covers the past 6 months showing the NASDAQ composite (OTC) in blue and a 40% trend (4 day EMA) of NASDAQ new highs divided by new highs + new lows (OTC HL Ratio), in red.  Dashed vertical lines have been drawn on the 1st trading day of each month.  Dashed horizontal lines have been drawn at 10% levels for the indicator, the line is solid at the 50%, neutral level.

OTC HL Ratio was down for the week, but finished at a very strong 81%.

The next chart is similar to the one above, except it shows the S&P500 (SPX) in red and NY HL Ratio in blue, which was calculated from NYSE data.

NY HL Ratio remained at a sensationally high 98%.

The next chart shows the OTC in blue and a 10% trend (19 day EMA) of NASDAQ new highs (OTC NH) in green.

OTC NH remained very strong.

The next chart is similar to the one above except is shows the SPX in red and NY NH has been calculated from NYSE data.

NY NH declined last week, but remains at a very comfortable level.

Conclusion

Last week was encouraging.  The breadth indicators held up well, while prices weakened a little.

I expect the major averages to be higher on Friday July 29 than they were on Friday July 22.

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.