Technical Market Report For Saturday, March 6

Technical market report for Saturday, March 6, 2021

The good news is that the market is due for a bounce (at least). 

The Negatives

The Fed put out more hints about the end of free money. New lows reached threatening levels for around three days this past week. A Hindenburg Omen was triggered for three days last week. The secondaries underperformed the blue chips.

The first chart covers the past six months, showing the S&P 500 (SPX) in red and a 10% trend (19-day EMA) of NYSE new lows (NY NL) in blue. The NY NL has been plotted on an inverted Y axis, so decreasing numbers of new lows move the indicator upward (up is good). Dashed vertical lines have been drawn on the first trading day of each month.

No sign of relief here. It will take around 50 daily NYSE new lows to turn the NY NL upward.

The next chart is similar to the first one, except it shows the NASDAQ composite (OTC) in blue and the OTC NL in brown. The information has been calculated with NASDAQ data. It will take around 100 NASDAQ new lows to turn the OTC NL upward.

The Positives

The market is oversold and the recent index highs were confirmed by the breadth indicators, so there should be new highs for the blue chip indices in the near future.

The next chart covers the past six months, showing the SPX in red and a 10% trend (19-day EMA) of NYSE new highs (NY NH) in green. The NY NH held up pretty well over the tumultuous week.

The next chart is similar to the first one, except it shows the OTC in blue and the OTC NH in green. The information has been calculated with NASDAQ data. After confirming the record OTC high, the OTC NH is following the index downward.

The next chart covers the past six months, showing the SPX in red, and a 40% trend (four-day EMA) of NYSE new highs divided by new highs + new lows (NY HL Ratio) in blue. Dashed horizontal lines have been drawn at 10% levels for the indicator; the line is solid at the 50%, neutral level. The NY HL Ratio fell to 67%, remaining in positive territory.

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