2-18-18 Market Commentary


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Market Breadth: With this past week’s market advance, our Bull/Bear Point and Figure Ratio at 0.77 rose from 0.44 last week, advancing, but still within bearish territory. The total count of securities in bullish or bearish patterns decreased 14% to 2661. The count of bearish stocks decreased 30%, while the count of stocks in bullish patterns increased 23%. The Sand 2 Pirls P&F Market Breadth Summary Chart shows us a market now three weeks in bearish 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 0.40 points for the eleventh decline in 18 weeks. At a negative 137.80 points, it continues below all eight tops in the last 30 months, and continues below the April 2017 bottom and above all four remaining bottoms below -100 in the last 30 months. 

Volume Analysis: In this week’s volume analysis, the NASDAQ Composite Index ended in neither Accumulation nor Distribution mode with average daily volume lower 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 Accumulation mode on higher average daily volume.

Momentum: With 6 days below zero at Friday 2/9 close, the CCI(20) daily is now in a Woodie’s Down trend. At +10.75, up from -202.42 last week, it now has one day above zero and is within the +/-50 range for a ZLR Short 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 ninety-four weeks ago, while the Daily CCI(20) began a Woodie’s down trend one week ago.
The CCI(20) weekly at +72.83 is up from +13.8 last week after forming a ZLR (Zero Line Reject) Long entry signal for Tuesday 9/5 open, dropping below +100 Friday 2/9, signaling a trade exit at Monday 2/12 open. The result of this trade simulation was a gain of 521.86 points on the NASDAQ or $12.13 per share of QQQ.
In addition, at Friday 2/16 close, the CCI(20) weekly presented a ZLR Long entry signal for Monday 2/19 open. Wee will follow this new trade simulation in next week’s commentary.
Industry Rotation the last two weeks: All of the top five industries are  positive and four of the bottom five are negative. Summary: Brokers, KBW Bank, and some tech on top; Oil Services, Oil, and Gold & Silver on the bottom. Bullish: Oil Services and Oil continue in the bottom five. Brokers and Networkers continue in the top five. Comp Tech, Semiz PHLX, and KBW Bank have entered the to five. Computer Hardware has left the bottom five. Gold & Silver continues in the bottom five. Bearish: REITs has left the top five.
Focus this week: We simply present a quote with graphic from Jim Rickards Twitter, @JamesGRickards, 2/18/18 and wonder in the light of the market’s recovery this past week, is Mr. Rickards trying to spook the market or simply trying to warn us?

–Donald Pirl www.s2pmarketsignal.com

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