Broad Market Internals, May 30, 2014  
Volume collapsed in May registering the worst monthly tally of ’14 and casting doubt on the emerging theme of better activity levels seen earlier in the year. Best readings were in Media and Electricity, with Metals & Mining, Discretionary Consumer Goods, and Integrated Banks all exceptionally weak.

Breadth was again soft as has generally been the case since mid Mar, consistent with the LT trend. 52wk highs have remained highly subdued barely inching above the Apr best, Fri closing less than a 1/4qtr of the +2.5yr record from last May, with the best concentrations currently in Tobacco, Integrated Oil & Gas and Pipelines (for the 2nd and 3rd consecutive months respectively), and Office Equip. 52wk lows set an 18m record early May before ending the month negligible, with the worst concentrations in Mining and Comp Hardware.

Short term indicators - measuring the percentage of stocks above their 10-day moving average - have started to pull back after early last week hitting the most extreme overbought levels since mid Feb, but the recently more important 25-day indicator has only just entered heavily overbought territory suggesting the rally off the midmonth lows may have a little further to run.

At the same time the intermediate 50-day moving average has rallied back to mildly overbought, but recent intermediate market highs have coincided with dwindling peaks in this indicator since last spring. Finally the LT 200-day indicator is just about mildly overbought having steadily declined since setting a +2yr record last Jul. As a result the broad market is hitting record highs with barely half of all stocks above their 200-day moving average and 52wk highs near negligible!.


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