Monday marked the end of the first quarter and the S&P 500 recorded its fifth straight quarter of gains, only the fifth time this has happened over the last 40 years. Generally positive economic data got the market off to a good start for April and the second quarter, with the S&P 500 (^SPX) and Dow Jones Industrial Average (DJIA) hitting all-time highs. However, a lackluster jobs report on Friday sucked the wind out of the sails, sending the broad market indexes sharply lower to end the week. The Nasdaq Composite (^COMPX) bore the brunt of the abuse on Friday, dropping 2.6%. Once again Internet stocks were battered this week, with the S&P Internet industry index losing 3.6%.

The iShares Dow Jones U.S. Index Fund (IYY) ended the week up just over 0.6%. Like the broad market indexes, IYY also marked multiple new all-time highs this week before dropping 1.3% on Friday. The ETF did violate its new short-time support around $95, but more significant support is available around $93.00.

For the week ending April 4, 2014, one CI Market Dashboard indicator is bullish, three are bearish, and five are neutral.

Indicators worth mentioning this week:

  • With the IYY still trading above its 100-day simple moving average, this indicator is still our sole bullish signal. The spread between IYY’s closing price and its moving average even expanded this week, up to 2.6% from last week’s 2.3%. As long as IYY stays above the moving average, this indicator will be bullish.
  • IYY’s MACD line closed all but even with its signal line this week, leading to a rare neutral signal for this indicator after three weeks of bearish signals.
  • The percentage of NYSE stocks trading above their 50-day moving average continues to be bearish until its reading either falls below the 25% bullish threshold and then rebounds above 25% or no subsequent confirming bearish signal is generated before the current bearish signal goes “stale” and reverts back to neutral on September 12, 2014.
  • The NYSE Bullish Percentage P&F chart closed the week at 70.72%, again moving above the 70% bearish threshold. The indicator was already bearish, so a move back below 70% would reset the six-month mark where the bearish signal would go “stale.” As of now, the signal would revert back to neutral on September 26, 2014.
  • The gap between $NASI and its five-day exponential average closed a bit this week, but the $NASI is still below the average. Furthermore, the MACD of $NASI ended the week its signal line, making the indicator bearish.

 

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Wayne Thorp
ABOUT THE AUTHOR:

Wayne A. Thorp, CFA, is editor of Computerized Investing and a vice president and the senior financial analyst at The American Association of Individual Investors (AAII). He is also the program manager for AAII's Stock Investor Pro fundamental stock screening and research database program and is on the advisory boards of AAII's Stock Superstars Report and Dividend Investing newsletters. He holds the Chartered Financial Analyst (CFA) designation and is a 1997 honors graduate of DePaul University in Chicago. Wayne's interests include stock screening, technical analysis and charting, social media and tech gadgets. However, in the summer he'd prefer to be hip-deep in northern Michigan's Manistee River fly-fishing for rainbow trout.

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