For the week ending July 3, 2014, three CI Market Dashboard indicators were bullish, two were bearish and four were neutral. This reflects the gain of one new bullish signal, which reversed from bearish.

The holiday-shortened week closed the book on the month of June and the second quarter, both of which saw solid gains for the broad market indexes. News was generally light, but a strong jobs report on Thursday sent the market higher entering the Fourth of July weekend.

Looking at the U.S. equity markets, the Dow Jones industrial average (DJIA) topped the 17,000 level for the first time ever and closed the week at 17,068.26. The blue-chip index posted a 1.3% for the week. For June the index was up 0.7% and 2.2% for the second quarter.

The S&P 500 Index (SPX) was up 1.2% this week and closed at 1,985.44, a new all-time-high. The large-cap index is facing a significant round-number barrier at 2,000 so it will be interesting to see its behavior as it closes in on this milestone. All but one of the nine S&P Select Sector SPDR ETFs were in the green this week. The technology sector lead the way with a 2.2% gain while utilities slid 2.83%. For the month, the SPX was up 1.9% and added 4.7% for the second quarter.

The broad market Wilshire 5000 (W5000) index was up 1.25% this week, powering through round-number resistance at 21,100 to close at another new all-time-high of 21,107.54. For June, the index was up 2.52% and 4.33% for the quarter.

Lastly, the Nasdaq Composite (COMP) jumped 2% this week and closed at a new 14-year high at 4,485.93. The COMP posted a strong monthly gain of 3.9% in June to go along with an equally impressive gain of nearly 5% for the quarter.

In terms of the CI Market Dashboard, the iShares Dow Jones U.S. Index Fund (IYY) gained 1.14% this week to close at a new all-time high of $100.27. The $100 psychological barrier I mentioned last week did not appear to be any hindrance at all, so we should expect it to offer support in the event of the downturn.

Market Dashboard indicators worth discussing this week are:

  • IYY remained above its 100-day simple moving average, so the iShares Dow Jones Index Fund 100-day Moving Average Crossover indicator also remains bullish. The difference between IYY’s closing price and the moving average widened to 5.38%.
  • The MACD on IYY changed its signal for the second week in a row as the MACD line on IYY closed above the signal line, meaning the MACD on iShares Dow Jones U.S. Index Fund indicator went from bearish to bullish. The MACD of IYY ended the week at +0.896 while the signal line reading is at +0.857.
  • The percentage of NYSE stocks trading above their 50-day moving remained bearish this week with a reading of 81.17%. This is the third week in a row the reading has been above the bearish threshold. We are waiting for the indicator to fall back below the 75% bearish threshold, thereby generating a confirming bearish signal and resetting the “stale date” on which the signal will revert back to neutral without another bearish signal for six months.
  • The NYSE Bullish Percentage P&F chart rose to 74.70% and the indicator remains bearish. This is the fifth week in a row this indicator has been above its bearish threshold. We are now waiting for the reading to fall back below the 70% bearish threshold, which would result on a confirming bearish signal and would rest the “stale date” on which the signal would revert to neutral without another bearish signal for six months.
  • The NASDAQ Summation Index Moving Average Crossover with MACD Confirmation indicator remains bullish for the seventh straight week. The $NASI (+317.79) closed the week above its five-day exponential moving average (+261.67). The second half of this bullish signal is the MACD line of $NASI (+136.633) being above the signal line (+127.082).
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Wayne Thorp

Wayne A. Thorp, CFA, is a vice president and the senior financial analyst at the American Association of Individual Investors (AAII). His primary responsibility is to oversee AAII's content strategy. 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. He is also a rabid University of Michigan and Detroit Red Wings fan.

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