Last week’s call worked out, again! The market closed higher while we got a mild pull back of almost 1%, as written last week.

Setup for week 10 is neutral to slightly bearish, hence I expect a lower close. This call remains valid until Thursday. Friday’s non-farm payroll numbers can be game changing.

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Price Action

[bullish]

  • Direction: long term up, intermediate-term up
  • Volatility: very low, ranked long-term volatility bellow intermediate term volatility
  • Trend-health: long-term trending environment (TSI >1.65) and intermediate trend conditions have weakened.
  • Channel: intermediate channel position very low.
  • OB/OS: RSI(5)>50 and 50 and
Overall price action is providing a bullish environment (B-J).

Seasonality

[neutral]

Seasonality is bullish for March (K). First week of March is neutral (L).

Correlation

[neutral]

Correlation (M) among S&P500 members remains VERY low (

Read more about my correlation related research here.

Breadth

[bearish]

Market Breadth (N) is at high absolute levels and continued to go-up, indicator value is at highest quartile. In the past this has been a highly negative setup.

Sectors

[neutral]

No particular conclusion can be drawn from sector setup (O).

Bonds

[positive]

RISK ON for the bond market (P). Generally this is positive for the stock market, especially with a combined setup of DIRECTION & VOLATILITY.