Last week’s call worked out almost as predicted: “sideways move with the low in the range of 1-2%”. We saw the low of the week bellow 1.18% of the opening. The week closed with a loss -0.4%.
Setup for week 13 is positive, hence I do expect a higher close. In case we see a pull-back it certainly won’t be a deep one (max 1.0 %)
Price Action
[bullish]
- Direction: long term up, intermediate-term up
- Historical volatility: long-term low, short-term rising
- Trend-health: long-term trending environment (TSI >1.65) and intermediate trend conditions are high.
- Channel: intermediate channel position bellow mid-point.
- OB/OS: RSI(5)>50 and 50 and
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Seasonality
[bullish]
Seasonality is bullish for March (K) as well as for week 12 of the year (L).
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Correlation
[neutral]
Correlation (M) among S&P500 members is higher (>0.25) . Short-term we continue to see a significant expansion (RSI2>95).
Read more about my correlation related research here.
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Breadth
[neutral]
Market Breadth (N) for top performers is at high absolute levels and decreased over the week.
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Sectors
[bearish]
Sector setup (O) is bearish. The sector leaders are XLI (Industrials) and XLF (Financials).
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Bonds
[positive]
RISK ON for the bond market (P). Generally this is positive for the stock market, especially with a combined setup (BONDS and DIRECTION).
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