Last week’s call worked out partially. We saw the expected weakness early in the week followed by two up-days. SPY finished the week with -0.64%.
For the coming week we’ve got a rather bullish setup. I do expect a positive week.
- Direction: long term up, intermediate-term slightly positive
- Historical ranked volatility: long-term above 0.25 and bellow 0.50
- Trend-health: long-term trending environment (TSI >1.65) and intermediate trend conditions are above 25 and bellow 50.
- Channel: intermediate channel position within lower range.
- 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) and week 16.
Correlation (M) among S&P500 members is increasing (>0.25 and <0.5) . Short-term we see a significant expansion (RSI3 of correlation>75)
Read more about my correlation related research here.
Market Breadth (N) has weakened, but still up-trending.
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).