3-12-17 Market Commentary



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Market Breadth
: With this past week’s market fractional decline, our Bull/Bear Point and Figure Ratio at 1.19 was down from 1.46 last week, yet continuing within bullish territory. The total count of securities in bullish or bearish patterns increased 1% to 3210. The count of bearish stocks increased 14%, while the count of stocks in bullish patterns decreased 8%. The Sand 2 Pirls P&F Market Breadth Summary Chart shows us a market now seventeen weeks in bullish territory. Paid subscribers have access to the OpenOffice Calc data from which the chart is generated.

The well known market breadth indicator, the NASDAQ McClellan Summation Index (NASI) fell 230 points for the eighth decline in seventeen weeks. At a positive 76.98 points, it has fallen below that November 2014 top, and the March 2015 top, and continues below the December 2016, April 2016, May 2016, and August 2016 tops above +100, and it continues above all five bottoms below -100 in the last 3 years. 

Volume Analysis:
In this week’s volume analysis, the NASDAQ Composite Index ended in Accumulation mode with average daily volume lower than the prior week. In the last two weeks the NASDAQ had four (4) Accumulation days and two (2) Distribution days. (Accumulation days are counted when the index closes up on higher volume than the prior day while Distribution days occur when the index closes down on volume higher than the prior market day.) Last week the NASDAQ ended in neither Accumulation nor Distribution mode on higher average daily volume.

: Now at +60.83 down from +71.21 last week, the CCI(20) daily within the +/- 50 zone on Friday 3/10 has signed a ZLR (Zero Line Reject) Long entry for Monday 3/13 open. We will follow the results of this trade simulation in next week’s commentary.
In Woodie’s CCI trading system, six consecutive bars above or below zero are required for a change of trend. The Weekly CCI(20) of the NASDAQ Composite Index began a Woodie’s up trend forty-five weeks ago, while the Daily CCI(20) began a Woodie’s up trend sixteen weeks ago.
The CCI(20) weekly has fallen to +122.02 from +146.22 last week. We await the return of the CCI(20) weekly to the +/-50 range for another trade.

Industry Rotation the last two weeks:
All of the top five industries are  positive and all of the bottom five are negative. Summary: Some Tech and Banking on top, Gold & Silver and REITs on the bottom. Bullish: KBW Bank and Comp Tech continue in the top five. Semis PHLX and Disk Drives have entered the top five. Gold & Silver PHLX continues in the bottom five. Oil Services PHLX has entered the bottom five. Brokers has left the bottom five. Bearish: REITs has entered the bottom five.
Focus this week: From www.zerohedge.comAs Retail Investors Flood Into Stocks, Professionals Are Dumping Speculative Longs“. The following are some key points and charts.

  • “Fear of missing out” is quickly becoming the go to phrase for what’s left of America’s stock market investors. As The Wall Street Journal reports, investors have poured money into stocks through mutual funds and exchange-traded funds in 2017, with global equity funds posting record net inflows in the week ended March 1 based on data going back to 2000, according to fund tracker EPFR Global. Inflows continued the following week, even as the rally slowed.

    “People went toe in the water, knee in the water and now many are probably above the waist for the first time,” said JJ Kinahan, chief market strategist at TD Ameritrade.

  • Bullishness among Wall Street newsletter writers reached 63.1% – the highest level since 1987 – a week ago in a survey by Investors Intelligence, before falling to 57.7% this past week.

  • Perhaps they should be paying attention to the insiders (who are selling like never before)…Ned Davis Research points out that insider selling has been elevated enough to trigger his firm’s in-house bearish signal for 11 weeks in a row, the longest stretch since 2014.

  • Insider Buys

    And the utter lack of breadth in the market’s most recent advance…

  • However, despite all that exuberant money flow from the FOMO-followers, not everyone’s buying it as speculators have entirely erased their massive record net long position…


    Swinging to net short for the first time since the week before the election…

  • While Millennials may have been the SNAP IPO greater fools, it appears the retirees are the broad market’s greatest fool, getting neck-deep in stocks at record high valuations, once again buying high, only to sell low.


–Donald Pirl www.s2pmarketsignal.com

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