General Stock Market Commentary
MON Sector Strength - TUE Rates - WED Breadth Momentum Volume - THU Commodities Currency - FRI Sentiment - SAT Week Review, ECRI
MON Sector Strength - TUE Rates - WED Breadth Momentum Volume - THU Commodities Currency - FRI Sentiment - SAT Week Review, ECRI
Disclaimer: This analysis is not a recommendation to buy, sell, hold or sell short any security (stock, ETF or otherwise).
1999-2001
The chart above is the 1999 through 2000 period which was led by the large caps. To me, this period seems similar to 2015.
One difference is that in late 2000, once the SPX broke down it was never able to break above the 50-day again. Whereas, in 2015, the SPX has bounced back and is now testing the prior highs.
Bullish Percents
Above is the spreadsheet in which I track the Bullish Percents. Blue is a shift higher, red a shift lower.
Most of the important indexes are now solidly to the right of the 50% level. It is getting harder and harder for the bears to make a case for lower prices, at least in the near-term.
With the strong US Dollar, I think we can expect that the Energy, Materials, Gold Miners have peaked, and we should see lower prices and lower bullish percents for these sectors in the weeks ahead.
But I think weakness in those areas pushes up the prices for Consumer, Health Care, Technology stocks, and we should see higher prices and higher bullish percents for the sectors in the weeks ahead.
Two of the leading industries for the market are the brokers and the semi-conductors, and they are doing quite well at the moment which is bullish for the market overall.
The brokers do well when short-term rates increase, and the semi-conductors are extremely volatile and economically sensitive so that they just seem to lead the overall market.
Bottom Line: The bullish percents have bounced back and are now skewed right in bullish fashion. This spreadsheet isn't as bullish looking as it was in early 2015, but it continues to support higher prices ahead.
Most of the important indexes are now solidly to the right of the 50% level. It is getting harder and harder for the bears to make a case for lower prices, at least in the near-term.
With the strong US Dollar, I think we can expect that the Energy, Materials, Gold Miners have peaked, and we should see lower prices and lower bullish percents for these sectors in the weeks ahead.
But I think weakness in those areas pushes up the prices for Consumer, Health Care, Technology stocks, and we should see higher prices and higher bullish percents for the sectors in the weeks ahead.
Two of the leading industries for the market are the brokers and the semi-conductors, and they are doing quite well at the moment which is bullish for the market overall.
The brokers do well when short-term rates increase, and the semi-conductors are extremely volatile and economically sensitive so that they just seem to lead the overall market.
Bottom Line: The bullish percents have bounced back and are now skewed right in bullish fashion. This spreadsheet isn't as bullish looking as it was in early 2015, but it continues to support higher prices ahead.
ECRI, M2, Small Caps
The chart above shows the ECRI in the top panel, and it isn't looking good. In fact, it is quite alarming.
The other panels show an improving scenario that supports higher stock prices, but the ECRI does not.
If you look back over the last few decades, this indicator leads the economy quite well, but there are also lots of occasions where it showed weakness only to bounce back. Spring of this year for example.
If this ECRI is really flashing a slow down in the economy, some of the other indicators will start to confirm it such as the new 52-week lows. So far, there is no confirmation. But I am watching.
Bottom line: I don't like the looks of this ECRI at all, but, for now, I think that as long as this indicator remains above -5%, and the other indicators remain supportive, stock prices can move higher.
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