Last week’s call worked out well: higher close with a mild pullback.
For next week we’ve got a mildly bullish signal. In case of a pull-back no more than 2%.
- Direction: long term up, intermediate-term up
- Historical ranked volatility: 0.25 – 0.50, bellow mid-point
- Trend-health: long-term trending environment (TSI >1.65) and intermediate trend conditions are high, but lower than 5 days ago.
- Channel: intermediate channel position above mid-point.
- OB/OS: RSI(5)>50 and <75, RSI(10)>50 and <75, intermediate term time stretch in lower quartile.
Seasonality is bullish for April(K), especially during first week of April.
Correlation (M) among S&P500 members is higher (>0.25) . Short-term we see a decrease in correlation (RSI2<50).
Read more about my correlation related research here.
Market Breadth (N) for top performers is at high absolute levels and decreased over the week.
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 (BONDS and DIRECTION).