Saturday Bullish Percents
Disclaimer: All charts and comments are intended for education and discussion purposes only. No investment recommendations are being offered. Please do your own research and take responsibility for all investment decisions that you make. Questions and comments related to this post are encouraged. | MON - Sector Strength | TUE - Interest Rates | WED - Market Breadth | THU - Commodities & Currencies | FRI - Market Sentiment | SAT - Bullish Percents | About | contact: HeadlineCharts@gmail.com |
ECRI notes that their leading economic indicator has ticked up to an eleven week high, but is still well within recession territory. This is consistent with what Trim Tabs is reporting. It is finding the most up-to-date indicators of tax receipts and tax withholdings are showing the economy gaining some steam again.
Also, the ECRI gauge of current economic activity still hasn't dipped into negative territory which means that there is still a sliver of economic growth rather than contraction. Q1 growth therefore should be around the .5% level. (I'm no economist, I just try and interpret these reports from the people who are... and even that isn't easy).
The ECRI future inflation gauge remains contained but hasn't moved down much lately which is what you'd expect if the economy was contracting. So this is another positive sign of growth.
This week the worrisome new lows improved, ticking lower on both exchanges until both are now at much better levels. This development improved the market outlook and I took a position in a Technology ETF because tech looked like it was starting to make its move. Of course, the bad response to Microsoft on Friday now puts some clouds back above this group. All eyes are now on the S&P 500 to see if it breaks above 1400 to join the industrials and transports in bullish chart breakouts. Based on the action in the SPX bullish percent, I suspect it will.
Red is a column of O's in a downtrend, blue is a column of X's in an uptrend. Below 30% is oversold, and above 70% is overbought. Yellow is a shift down, green is up.
The breakouts above the 50% level for the midcaps and the SPX are very bullish. We need more than 50% of the stocks in the S&P 500 to be on bullish chart patterns in order to push above important resistance and lead the market. Without the biggest and best companies moving higher, a rally is unlikely to succeed. The break above 50% for the mid caps is also encouraging because it means the market strength is broadening out into the less financially powerful companies.
Gold, Materials, Agriculture stocks took a bullish percent dip. Maybe in anticipation of a bounce in the US Dollar? The Energy bullish percent is very overbought, so if the dollar does rally there could be a pullback coming in this group.
More positive news for the market is that the financials are maintaining above 50%. The group is retaining its strength and maybe the stocks aren't just in an oversold bouce.
The wall street Brokers are also starting to respond with a shift to a bullish column of X's. The market usually needs this group to participate.
I'm still working on the commodity bullish percent indicator, but isn't ready just yet.
