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Bulls Are Still In Charge.

|Includes: DIA, QQQ, SPDR S&P 500 Trust ETF (SPY)

Breadth Sentiment

Despite the increase in volatility caused by the weakness in the technology sector, FED's rate increase and options (stocks, indexes and futures) expiration, the current week was flat with exception of the Nasdaq 100 index that declined 1.05% over the week. On the other hand the DJI index gained 0.54% for the current week.

Side-way trending did not make a lot of changes in the long-term Breadth numbers:

72% of the S&P 500 index listed stocks are bullish (1% more than a week ago);
80% of the DJI index listed stocks are bullish (3% more than a week ago);
75% of the Nasdaq 100 index listed stocks are bullish (2% less than a week ago);
65% of the Russell 2000 index listed stocks are bullish (1% less than a week ago);
62% of the NYSE index listed stocks are bullish (1% more than a week ago).
Source: https://www.marketvolume.com/advance_decline/

Not a lot of changes. The same as before the Long-term Bulls are in charge. The weakness in the Technology market sector did not pushed the Nasdaq 100 to critical level and it has net spread to the rest of the market.

Also, from the charts below we may see, while the Nasdaq 100 index is making double bottom, the DJI, S&P 500 and NYSE composite indexes are in the up-trend which confirms that the correction in the Technology sector is an isolated incident only.

Shorter-term Breadth numbers are positive also:

350 of the S&P 500 listed stocks are trading above their 200-day SMAs - up by 10 stock,
321 of the S&P 500 listed stocks are trading above their 120-day SMAs - down by 3 stocks,
337 of the S&P 500 listed stocks are trading above their 50-day SMAs - up by 4 stocks,
333 of the S&P 500 listed stocks are trading above their 20-day SMAs - down by 17 stocks.
Source: https://www.marketvolume.com/stockscreener/sp500scan.asp

On all time-frames we see strong Bulls - more than 50% of the S&P 500 listed stocks are in Bullish trend. Yes, we may see another week of a side-way action, yet, the odds are on the bullish side for the coming week.

Volume Sentiment

When we look at volume on the major market indexed, we may see an increase in the average volume on the S&P 500, DJI and Nasdaq 100 indexes, not on the Russell 2000 and NYSE Composite indexes. An increase in trading volume was mainly caused by a strong volume surge recorded on Friday, June 16th of 2017. On that day, the Nasdaq 100 index had strongest daily volume since August 24th of 2015.

We may clearly see that as the Nasdaq 100 made double bottom, the huge wave of the Bullish traders entered the market and started to buy by creating a strong output of volume. If these Bulls continue holding their buying pressure, they may reverse the Nasdaq 100 index up and push the entire market higher. Such strong increase in trading volume suggests the strong presence of the Bulls.

The same as a market Breadth sentiment, market volume sentiment favors the Bulls for the coming week.

Volatility Sentiment

Current week brought us some increase in volatility. As a rule, an increasing volatility is a bearish sign and it could be witnessed during a down move. However, current volatility is still low. Actually, the volatility moved up from the historically lowest level, to the average level we saw during the post-election Trump's rally.

We also have to bear in mind that we are entering summer season. While it is still more than a month until vacations season in August, we may expect seeing a decline in volatility and trading volume in the coming weeks. Therefore, current increase in volatility is healthy and it would provide a room for future decline in volatility during summer-vacation period.

Summary

While increasing volatility points to increase in uncertainty among some investors, the volatility is still at very low level to consider something serious. At the same time, volume and Breadth data are positive and they suggest higher odds of bullish trading for the coming week.

Charts
(Charts source: https://www.marketvolume.com/charts/ )
Chart #1-5: Market Breadth charts




Chart #6: index volume chart

Chart #7: Index Volatility Chart

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.