Last week’s call worked out only partially as we saw a minor dip though we stayed within my range of no more than 2%.
For this week we’ve got a mixed signal on the board. Due to last Friday’s non-farm payroll numbers futures are in the red. I do expect weakness to continue early in the week. Closing the week we will be flat.
- Direction: long term up, intermediate-term up
- Historical ranked volatility: long-term bellow 0.50, intermediate-term between 0.50 and 0.75
- Trend-health: long-term trending environment (TSI >1.65) and intermediate trend conditions are very low and lower than 5 days ago.
- Channel: intermediate channel position very low
- OB/OS: RSI(5)>25 and <50, RSI(10)>25 and <50, intermediate term time stretch in lower quartile.
Seasonality is bullish for April(K), week 15 of the year is slightly bearish
Correlation (M) among S&P500 members is very low (<0.25) . Short-term we see a decrease in correlation (RSI2<25).
Read more about my correlation related research here.
Market Breadth (N) for top performers is at high absolute levels.
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).