Where Does the Market Stand After Thursday s Rally? Two of the sentiment indicators moved in opposite directions.
Markets rallied Thursday after declines earlier this week. So where do we go from here?
Let s check the latest index charts and market data.
On the Charts
All the equity indices closed higher Thursday with positive internals on the NYSE while the Nasdaq had slightly positive breadth but negative up/down volume.
The charts saw some improvement with the S&P 500 (see below), DJIA, MidCap 400 and Value Line Arithmetic Index closing above their near-term downtrend lines and now neutral, while the MidCap and Value Line reclaimed their 50-day moving averages as well.
Index Charts See Further Weakening NYSE cumulative breadth deteriorates.
May 12, 2021 | 10:25 AM EDT
All the major equity indices closed lower Tuesday with negative internals on the NYSE while the Nasdaq had negative breadth but positive up/down volume.
The charts saw violations of uptrends with some bearish stochastic crossovers added into the mix. However, in our view, the Nasdaq 100 and Nasdaq Composite suffered less damage with some large-cap growth names closing higher on the day. Whether this proves to be a potential rotation out of what we see as extended recovery names back into growth has yet to be clarified. Cumulative market breadth deteriorated as well.
2 Index Charts Flash Bearish Gravestone Doji Signals Sentiment Data Still Suggests Too Many Bulls Currently
The charts say caution is warranted.
Indeed, with Monday s declines, some 50-day moving averages of the major equity indices were violated to the downside and a few gravestone doji signals appeared. Meanwhile, the psychology data continues to suggest an excess of bullish expectations on the part of investors persists while insiders have yet to show any significant interest in buying their stocks at current levels.
So, while the proverbial horse may have left the barn, the new chart signals combined with the sentiment data suggest we shift our near-term macro-outlook for equities from neutral/positive to neutral .
Market Dashboard: Split Performance, Chart Trends and Data Sentiment data continue to suggest an excess of bullish sentiment persists.
May 10, 2021 | 10:26 AM EDT
The recent split performance of the major equity indices has yet to show signs of abating, with most of them in near-term bullish trends.
All the indices closed higher Friday with positive internals on the NYSE and Nasdaq.
Most closed at or near their intraday highs except for the Nasdaq Composite and Nasdaq 100 closing near their midpoints as they continue their recent underperformance.
The S&P 500, DJIA, Dow Jones Transports, MidCap 400 and Value Line Arithmetic Index posted new all-time closing highs.