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Bullish Momentum Faded

|Includes: SPDR Dow Jones Industrial Average ETF (DIA), IWM, QQQ, SPY

A week ago we stated:

  • "The Breadth momentum remains strongly bullish and it favors the Bulls for the coming week. However, the market indexes came close to some previously set resistance levels."

The market reported modestly positive week. As of now

  • 41% of the S&P 500 index listed stocks are bullish - up by 2% from a week ago - Weak Bearish Breadth;
  • 47% of the DJI index listed stocks are bullish - unchanged from a week ago - Weak Bearish Breadth;
  • 46% of the NASDAQ 100 index listed stocks are bullish from a week ago - up by 1% - Weak Bearish Breadth;
  • 27% of the Russell 2000 index listed stocks are bullish - up by 1% from a week ago - Bearish Breadth;
  • 32% of the NYSE index listed stocks are bullish - up by 3% from a week ago - Bearish Breadth.

We had 5 positive weeks in a row. Still the Breadth on the major indexes is bearish The DJI (DIA) and Nasdaq 100 (QQQ) climbed up close to the bullish threshold, yet, the number of the bearish stocks on these indexes is still dominant.

The past week delivered only small positive Breadth changes. We may say that the Bullish momentum faded. We continue seeing the dominance of the bearish stocks on the NYSE. Only 32 % of the NYSE stocks are traded closer to their 52-week highs - the rest (majority) are in the long-term bearish trend. The long-term market sentiment is bearish.

NYSE index High-low Breadth chart

Short-Term Breadth Sentiment Analysis

Shorter-term market Breadth by the end of the week shows following numbers:

  • 34% of the S&P 500 (SPY) stocks are above their 200-day MA - down by 1% from a week ago - Bearish Breadth,
  • 33% of the S&P 500 stocks are above their 120-day MA - up by 1% from a week ago - Bearish Breadth,
  • 67% of the S&P 500 stocks are above their 50-day MA - up by 3% from a week ago - Bullish Breadth,
  • 24% of the Russell 2000 (IWM) stocks are above their 200-day MA - unchanged from a week ago - Bearish Breadth,
  • 24% of the Russell 2000 stocks are above their 120-day MA - unchanged from a week ago - Bearish Breadth,
  • 60% of the Russell 2000 stocks are above their 50-day MA - up by 3% from a week ago - Weak Bullish Breadth.

Both, Small cap (Russell 2000) and Large Cap (S&P 500) market sectors had little to no changes in the market Breadth sentiment. The overall numbers remain bearish with exception of the stocks traded above and below 50-day MA.

The Breadth data favor side-way trending for the weak ahead.

Russell 2000 Percent above 50-day MA

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