It’s a new week, so let’s start things off right with an objective review of my key market models/indicators and see where things stand. To review, the primary goal of this exercise is to try and remove any subjective notions about what “should” be happening in the market in order to stay in line with what “is” happening in the markets. So, let’s get started.
The State of the Trend
We start our review each week with a look at the “state of the trend.” These indicators are designed to give us a feel for the overall health of the current short- and intermediate-term trend models.
Executive Summary:
The short-term Trend Model has slipped to neutral – albeit by the slimmest of margins.
The short-term Channel Breakout System remains positive. A break below 2428 early in the week and 2444 later in the week would turn the indicator negative.
The intermediate-term Trend Model is currently positive. However a move below 2450 would cause a change.
The intermediate-term Channel Breakout System continues on its 8/22 Buy signal. A break below 2417 flips the indicator to red.
The long-term Trend Model remains positive.
The Cycle Composite continues to point lower into mid-October.
All three Trading Mode models call this a mean-reverting environment.
In sum, we’ll call the trend board modestly positive, but only by a slim margin.
The State of Internal Momentum
Next up are the momentum indicators, which are designed to tell us whether there is any “oomph” behind the current trend…
Executive Summary:
Both the short- and intermediate-term Trend and Breadth Confirm Models slipped to neutral last week.
The Industry Health Model remains stuck in the neutral zone
The short-term Volume Relationship continues negative and up-volume is now at the lowest level seen since mid-2014
The intermediate-term Volume Relationship continues to struggle with Demand Volume still in a clear downtrend.
The Price Thrust Indicator managed to get up off the mat last week and remains neutral here.
The Volume Thrust Indicator is also neutral to start the week.
The Breadth Thrust Indicator remains positive by a small margin.
In sum, the momentum board is largely neutral as there isn’t any real “oomph” in the market at this time.
