My Song Remains The Same

Good Monday morning and welcome back. Since it’s Monday, let’s get right to our objective review the key market models and indicators. The primary goal of this exercise is to remove any subjective notions about the markets and ensure that we stay in line with what “is” happening in the market. So, let’s get started…

The State of the Trend

We start 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 is technically negative at this time, but could move into neutral with modest upside move. 
  • The short-term Channel Breakout System remains negative but could quickly give a buy signal with market now in a “mean reverting” mode. 
  • The intermediate-term Trend Model remains positive. 
  • The signals are the same for both intermediate-term and the short-term Channel Breakout System given the move back to a “mean reverting” mode. 
  • The long-term Trend Model remains solidly positive. 
  • The Cycle Composite suggests the bulls have the wind at their backs for the most part through the end of June. 
  • After a brief stint in the “trending” mode, the Trading Mode models have now flipped back to “mean reverting”
  • 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:

  • The short-term Trend and Breadth Confirm Model has been whipped around a bit lately, but is now neutral. 
  • Our intermediate-term Trend and Breadth Confirm Model has slipped to neutral. 
  • There is no change to the Industry Health Model again this week – stuck in neutral. To review, this suggests narrow leadership in the broad market. 
  • The short-term Volume Relationship remains negative – but only by a small margin. 
  • The intermediate-term Volume Relationship continues in positive territory, but the trend of the indicators continues to head the wrong direction. This tells me that market internals aren’t great right now. 
  • The Price Thrust Indicator had been falling prior to last week’s selloff and is now negative. 
  • The Volume Thrust Indicator remains in neutral mode. 
  • The Breadth Thrust Indicator is also neutral.
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    Author: Travis Esquivel

    Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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