Technical Stock Market Report

April 11, 2015

The good news is:  New lows have remained at insignificant levels.

The negatives:  The new high list expands in a strong market.  Most of the major indices are within 1% of their all time highs and the new high list looks anemic.

The chart below covers the past 6 months showing the S&P 500 (SPX) in red and a 10% trend (19 day EMA) of NYSE new highs (NY NH), in green.  Dashed vertical lines have been drawn on the 1st trading day of each month.

The SPX was up to within 0.7% of its all time high while NY NH was flat.

The next chart is similar to the one above except is shows the NASDAQ composite (OTC) in blue and OTC NH has been calculated from NASDAQ data.

The OTC finished the week 0.6% of its recent multi year high and within 2% of its all time high while OTC NH fell.

The positivesNew lows remained at insignificant levels last week.

The chart below covers the past 6 months showing the OTC in blue and a 40% trend (4 day EMA) of NASDAQ new highs divided by (new highs + new lows), OTC HL Ratio, in red.  Dashed horizontal lines have been drawn at 10% levels for the indicator, the line is solid at the neutral 50% level for the indicator.

OTC HL Ratio rose to a very strong 78% on Friday.

The next chart is similar to the one above except is shows the SPX in red and NY HL Ratio, in blue, has been calculated with NYSE data.

NY HL Ratio finished the week at a very strong 95%.

Money supply (M2)

The money supply chart was provided by Gordon Harms.

Money supply growth tumbled last week.

Conclusion:

Leadership continues to narrow while we are in the strongest period of the Presidential Cycle.

I expect the major averages to be higher on Friday April 17 than they were on Thursday April 10.

Mike Burk began developing equity trading systems in the early 1980's.  Through the 1990's he marketed an equity trading system called MIRAT based on breadth indicators, but, primarily new lows.  In the early days of this century he developed the seasonal trading strategies currently used by Alpha Investment Management of Cincinnati.  Mr. Burk has been writing equity market newsletters since the early 1990's.  During the past 10 years the letter observes both breadth and seasonal strategies.
 
The symbol for silver ‘AG’ comes from the Latin word ‘agentum’ meaning silver.