5-7-17 Market Commentary



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Market Breadth: With this past week’s market advance, our Bull/Bear Point and Figure Ratio at 1.19 fell from 1.51 last week, but maintaining bullish territory. The total count of securities in bullish or bearish patterns increased fractionally  to 3171. The count of bearish stocks increased 15%, while the count of stocks in bullish patterns decreased 9%. The Sand 2 Pirls P&F Market Breadth Summary Chart shows us a market now twenty-five 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) rose 29 points for the sixth advance in nineteen weeks. At a positive 149.49 points, it continues below all seven 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 neither Accumulation nor Distribution mode with average daily volume higher than the prior week. In the last two weeks the NASDAQ had three (3) 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 Distribution mode on higher average daily volume.

Momentum: Now at 92.32, down from +166.18 last week, the CCI(20) daily Woodie’s CCI(20) daily up trend continues. We wait for the CCI(20) daily to return to the +/-50 range for a valid ZLR (Zero Line Reject) long entry signal.
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 fifty-three weeks ago, while the Daily CCI(20) began a Woodie’s up trend twenty-four weeks ago.
The CCI(20) weekly has risen to 135.99 from +124.62 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: Brokers, S&P Retail, and some tech on top; Gold & Silver, Oil Services, REITs, and some tech on the bottom. Bullish: Brokers, Comp Tech, and S&P Retail continue in the top five. Gold & Silver PHLX and Oil Services PHLX continue in the bottom five. Computer Hardware has left the bottom five. Bearish: REITs continue in the bottom five. Semis PHLX has left the top five.
Focus this week: From www.zerohedge.comThe Last Time This Happened, China Devalued“. Key points and charts follow.

  • “It’s quiet, too quiet”, “the calm before the storm”, “the deep breath before the plunge” – you name the idiom, there is nowhere it applies more than US equity markets (lowest closing range in 65 years).

    Dow has done nothing for 8 days… the longest streak since 1952…

  • However, if ever there was a catalyst for chaos, it is the collapse in uncertainty around the Chinese Yuan

    Investors should be worried: The surge in volatility triggered by the yuan’s sudden depreciation two years ago rippled across the world and set off a rout in equities and other risky assets.

–Donald Pirl www.s2pmarketsignal.com

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