Here’s the rest of Friday’s Stock Market Commentary

TODAY’S COMMENT:

That’s not a very encouraging daily chart for the bulls.  Since I am expecting a relatively small pullback, it is not unexpected. Surprisingly, breadth continued to improve this week as more stocks participated in the market even as the S&P 500 declined. On longer term measures, that trend has not improved enough to correct the Breadth vs the S&P 500 indicator; it is still calling for a pullback, although it does not have to be a big pullback to clear this indicator. This indicator first warned on 12 December 2022, about 5-weeks before the top of the current 25% correction. This time it first warned on 19 May, 6-weeks ago.
 
                                                                                                                                                                   We look at a summary of indicators on Friday: The weekly rundown of indicators moved more strongly to the Bull side (now 6-bear and 15-bull). (These indicators tend to be both long-term and short-term, so they are different than the 20 that I report on daily.)

 
BULL SIGNS
-The smoothed advancing volume on the NYSE is rising.
-The 10-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%.
-The 100-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%.
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bullish crossover 3 July.
-Smoothed Buying Pressure minus Selling Pressure is rising.
-Long-term new-high/new-low data.
-Short-term new-high/new-low data.
-McClellan Oscillator.
-The long-term, 50-dEMA, Fosback Hi-Low Logic Index.
-The graph of the 100-day Count (the 100-day sum of up-days).
-On average, the size of up-moves has been larger than the size of down-moves over the last month.
-The 5-10-20 Timer System is BUY.
-The 5-day EMA is above the 10-day EMA so short-term momentum is bullish.
-S&P 500 spread vs. Utilities (XLU-ETF) shows the Index outpacing Utilities.
 
NEUTRAL
-There was a Distribution Day 6 July.
-There have been no Statistically-Significant days (big moves in price-volume) in the last 15-days.
-Sentiment.
-Bollinger Band Squeeze 28 April - expired.
-Bollinger Bands.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) has not been below 50%, for more than 3 days in a row.
-Overbought/Oversold Index (Advance/Decline Ratio).
-There was a Zweig Breadth Thrust 31 March. That’s a rare, very-bullish sign, but the McClellan Oscillator subsequently turned negative, so this indicator has expired.
-The S&P 500 is 9.6% above its 200-dMA. (Bear indicator is 12% above the 200-day.)
-10 May there was a Bullish Outside Reversal Day – Expired.
-The short-term, 10-day EMA, Fosback Hi-Low Logic Index is neutral.
-There have been 4 up-days over the last 10 sessions – neutral.
-There have been 11 up-days over the last 20 sessions - neutral.
-RSI
-There was a 90% down-volume day 9 March.
-There was a Hindenburg Omen signal 3 May 2023. The McClellan Oscillator turned positive 18 May. – Expired.
-The Calm-before-the-Storm/Panic Indicator flashed a panic-buying signal 10 November - expired.
-2.8% of all issues traded on the NYSE made new, 52-week highs when the S&P 500 made a new all-time-high, 3 January 2022. (There is no bullish signal for this indicator.) This indicated that the advance was too narrow and a correction was likely to be >10%. It proved correct, but is now Expired.
-VIX indicator.
-51% of the 15-ETFs that I track have been up over the last 10-days.
 
BEAR SIGNS
-Issues advancing on the NYSE (Breadth) compared to the S&P 500. The Index is too far ahead of Breadth.
-MACD of S&P 500 price made a bearish crossover 6 July.
-My Money Trend indicator is falling.
-Slope of the 40-dMA of New-highs is falling.
-The Smart Money (late-day action).
-XLI-ETF (Cyclical Industrials) is underperforming the S&P 500; the trend direction is flat to slightly down.
 
On Friday, 21 February, 2 days after the top before the Coronavirus pullback, there were 10 bear-signs and 1 bull-sign. Now there are 6 bear-signs and 15-Bull. Last week, there were 8 bear-sign and 14 bull-signs.
 
The daily spread of 20 Indicators (Bulls minus Bears) improved from -6 to +1 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from -21 to -14. (The trend direction is more important than the actual number for the 10-day value.) These numbers sometimes change after I post the blog based on data that comes in late. Most of these 20 indicators are short-term so they tend to bounce around a lot.
 
LONG-TERM INDICATOR: The Long Term NTSM indicator remained HOLD: PRICE is positive; SENTIMENT, VIX & VOLUME are neutral.
 
(The important BUY in this indicator was on 21 October, 7-days after the bottom. For my NTSM overall signal, I suggested that a short-term buying opportunity occurred on 27 September (based on improved market internals on the retest), although without market follow-thru, I was unwilling to call a buy; however, I did close shorts and increased stock holdings. I issued a Buy-Signal on 4 October, 6-days before the final bottom, based on stronger market action that confirmed the market internals signal. The NTSM sell-signal was issued 20 December, 8 sessions before the high of this recent bear market, based on the bearish “Friday Rundown” of indicators.)

Bottom line: I remain a cautious Bull, still expecting a decline of around 3-4% on the S&P 500 (from today’s close) to start soon. Indicators are suggesting there may be enough buying to delay a pullback a bit further, but I am skeptical of that.
 
FRIDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals improved to BUY. (My basket of Market Internals is a decent trend-following analysis of current market action, but should not be used alone for short term trading. They are most useful when they diverge from the Index.)