Last week, the bellwether S&P 500 essentially drifted sideways as it negotiated its 1,851 Jan. 15 all-time high from below but failed to establish a new one, closing down 0.13% for the week. Weak manufacturing and housing data weighed on the market, and the January Federal Open Market Committee minutes didn’t help matters by indicating almost certain tapering this year in bond purchases. #-ad_banner-#The tech-laden Nasdaq 100 (-0.03%) and blue-chip Dow industrials (-0.32%) also closed lower for the week, with only the small-cap Russell 2000, eking out a small gain of 1.34%. Year-to-date, the major U.S. indices are mixed with… Read More

Last week, the bellwether S&P 500 essentially drifted sideways as it negotiated its 1,851 Jan. 15 all-time high from below but failed to establish a new one, closing down 0.13% for the week. Weak manufacturing and housing data weighed on the market, and the January Federal Open Market Committee minutes didn’t help matters by indicating almost certain tapering this year in bond purchases. #-ad_banner-#The tech-laden Nasdaq 100 (-0.03%) and blue-chip Dow industrials (-0.32%) also closed lower for the week, with only the small-cap Russell 2000, eking out a small gain of 1.34%. Year-to-date, the major U.S. indices are mixed with the Nasdaq 100 up 1.97% and Russell 2000 up 0.1%, but the S&P 500 down 0.7% and Dow off 2.9%. Improving Momentum in S&P 500, but Other Indices Must Confirm Last week, I pointed out that the Moving Average Convergence/Divergence (MACD) indicator, which plots the difference between a 12-day and a 26-day exponential moving average, was indicating a near-term decision point for the S&P 500, from which its late January decline should resume if still intact. The green circle in the right lower edge of the chart below, an updated version of last week’s chart,… Read More

Last week, the bellwether S&P 500 continued its rebound from a successful test of underlying support at 1,730 at the beginning of the month. The U.S. broad market index finished Friday’s session at 1,839, 2.3% higher for the week and just off the all-time high at 1,851. #-ad_banner-#Year to date, however, the S&P 500, along with the blue-chip Dow 30 and small-cap Russell 2000, are in negative territory. The tech-laden Nasdaq is the only major U.S. index in positive territory in 2014, up 1.6%, and it must continue to lead on the upside for the broad market advance to continue. Read More

Last week, the bellwether S&P 500 continued its rebound from a successful test of underlying support at 1,730 at the beginning of the month. The U.S. broad market index finished Friday’s session at 1,839, 2.3% higher for the week and just off the all-time high at 1,851. #-ad_banner-#Year to date, however, the S&P 500, along with the blue-chip Dow 30 and small-cap Russell 2000, are in negative territory. The tech-laden Nasdaq is the only major U.S. index in positive territory in 2014, up 1.6%, and it must continue to lead on the upside for the broad market advance to continue. U.S. Stocks at a Minor Decision Point One quick look at a daily bar chart reveals that, despite a new all-time high being set on Jan. 15 at 1,851, the S&P 500 has essentially been drifting sideways since the beginning of the year. Moreover, the longer this sideways trade persists, the more it will look like the distribution phase that follows a sustained price advance and precedes a correction, as price momentum starts to wane and investors start booking near-term profits. One way to measure price momentum is via the Moving Average Convergence/Divergence (MACD) indicator, which plots the difference… Read More