For last week I’ve been neutral to slightly bearish as written (link) seven days ago. Until Tuesday the market showed a considerable pull-back (2.15%) . Though the week showed a gain of 0.19%.
Setup for week 11 is bullish, hence I expect a higher close for the week. Furthermore I’m expecting a mild pull-back in the range of ~ 1%.
- Direction: long term up, intermediate-term up
- Volatility: low, volatility expanding
- Trend-health: long-term trending environment (TSI >1.65) and intermediate trend conditions have weakened for twice over the last two weeks.
- Channel: intermediate channel position very low.
- OB/OS: RSI(5)>50 and <75, RSI(10)>50 and <75
Seasonality is bullish for March (K) as well as for week 11 of the year (L).
Correlation (M) among S&P500 members remains low (<0.25) . Short-term we saw a significant expansion.
Read more about my correlation related research here.
Market Breadth (N) for top performers is at high absolute levels and decreased over the week, indicator value is at highest quartile. In the past this has been a highly positive setup.
Sector setup (O) is bearish. The sector leaders are XLI (Industrials) and XLF (Financials).
RISK ON for the bond market (P). Generally this is positive for the stock market, especially with a combined setup of DIRECTION & VOLATILITY.