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Whenever I look at the market I try to view it from both sets of eyes - those of the bulls and the bears. For the better part of 2013 we've seen momentum and breadth drop, raising a yellow flag for the equity market. With the break above 1600 on the S&P 500 ($SPX) breadth has come back and started rising again along with some of the "risk on" metrics. The cyclical sectors have picked up their performance as noted by J.C. over at All Star Charts, with defensive sectors like healthcare and staples giving up some of their relative gains. The bulls had their fair share of battles to fight to get the intermarket view of stocks to improve, and it appears they have done their job. Below is a chart showing the breakout in three breadth indicators: advancing minus declining issues, the Summation index, and the percentage of stocks above their 50-day moving average.

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Turning to the bear side, we are extended to the upside. Yesterday's price action took us completely outside the upper Keltner Band. The Keltner Bands overlay is similar to Bollinger Bands, except it uses volatility (Average True Range) to determine the distance between the bands. The S&P 500 has broken above the upper band three previous times so far this year, the first time was ignored, and the second caused equities to momentary dip before continued to advance. A rise above the upper band just lets us know that the market is due for a breather or some type of consolidation, it doesn't mean we are about to enter a bear market. In my piece for TraderPlanet I noticed the level of resistance created by Andrews' Pitchfork, which we last came in contact with in April. While yesterday's close took us above the Keltner Band, it also knocked us into the Andrews' Pitchfork resistance (not sshown).

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When weighing the above views of the market, I have a feeling the breadth is more important for the longer-term trend of the market, while the bearish case is more concerning for short-term trading. I'll be watching to see if we have some type of consolidation while the buyers reload and keep breadth advancing and price moving higher.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the post.