Broad Market Internals, week beginning July 22, 2013  
Volume remained soft last week unusually failing to recover following the 4th July holiday. Best areas were Mobile Telecoms (again), Autos & Parts, Office Equip, and Internet.

Breadth reverted to ‘in line’ having previously been firm since mid Jun in contrast to the LT lagging trend. At the best levels Thu 52wk highs fell just short of the 2m record set a week earlier that in turn narrowly failed to match the mid May 3yr record, with the best concentrations in Integrated Banks, Integrated Oil & Gas, Mobile Telecoms (again), and Tobacco, while 52wk lows remain negligible.

Short term indicators - measuring the percentage of stocks above their 10-day moving average - are correcting now back into just heavily oversold territory after late the preceding week hitting the most extreme levels since early Jan, but the recently more relevant 25-day indicator set a new +6m record Thu.

Separately the intermediate 50-day moving average indicator also set a +6m record Thu, now back comfortably inside the range where intermediate tops of some importance quite reliably tend to develop from, assuming material technical divergences are in place. This precondition is potentially now satisfied, with new 52wk highs so far failing to not only rally above the May highs, but also the highs for the week holding below the best levels from the preceding week, although this dynamic naturally remains subject to change.



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Broad Market Internals, week beginning July 15, 2013 
Volume was soft last week recovering from the worst readings for an Independence Day holiday week since 2000. Best areas were Mobile Telecoms, Aero & Def, PMs, and Transports.

Breadth has been relatively firm since mid Jun after previously generally lagging since early Mar consistent with the LT trend. 52wk highs in aggregate at the best levels Thu fell within a whisker of the mid May 3yr record - despite most sectors setting new momentum records - with the best concentrations in Insurance, Autos & Parts, Office Equipment, and Mobile Telecoms, while 52wk lows have been substantially eliminated.

Short term indicators - measuring the percentage of stocks above their 10-day moving average - Thu hit the most extreme overbought levels since early Jan, as did the 25-day indicator that has recently been a better indicator of short term cyclicality.

Separately the intermediate 50-day moving average indicator is back within a whisker of extreme overbought territory, almost exactly at levels from which the mid May downside reversal developed. In the current position a blow-off is possible, but given the absence of volume recently extreme overbought conditions are more likely to spark a correction that could very well arrive in the run-up to Fri’s options expiry. However, the LT 200-day overbought indicator set a new +2yr high Fri, and being a fairly reliable leading indicator this tends to suggest that the bull market is not yet complete.



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Mid Week Subsector Performance Update July 10, 2013 
Short term leadership themes are somewhat mixed with an assortment of some of the most oversold groups recently as well as Defensive areas and especially Utilities leading on the upside, despite fellow interest rate sensitives in Telecoms being prominent amongst downside leaders.

Financials are also fairly well represented amongst the downside groups following on the heels of the parent sector having set a +2yr relative strength high earlier in the week, but the the Non-US peer group is on the cusp of entering a confirmed relative strength downtrend, in a potentially significant development since this group led the US by several months coming out of the fall 2011 multiyear lows versus the bread market.



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Broad Market Short term Overbought/Oversold Update July 2, 2013 
The short-term overbought/oversold indicator - measuring the percentage of stocks above their 10-day moving average - ended Tue backed fractionally off 7wk high set Mon, that fell within a whisker of extreme overbought that reliably trigger a downside reversal within a few days if the broad market is in a downtrend.

At the same time the equivalent 50-day measure remains contained below the downtrend line through the mid May highs, and if the broad market now rolls over basis ST overbought readings probabilities will favour the arrival of new momentum lows before a more enduring bottom is made.



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Broad Market Internals, week beginning July 1, 2013  
Last week volume set a fresh volume record for ’13, surprisingly not only eclipsing the prior week’s triple witching effected tally but also skewed towards the 2nd half of the week. Best areas were PMs, Forestry & Paper, Pharma, Mobile Telecoms, and Home Builders (all again ), as well as Regional Banks, Real Estate and Environmental.

Breadth was firm for the 2nd straight week after generally having lagged since early Mar consistent with the LT trend. 52wk highs ended the week around a 1/4qtr of the mid May 3yr record, with the best concentrations in Personal Goods, Regional Banks, Insurance, Media and Mobile Telecoms, with 52wk lows back to negligible and recently well contained.

Short term indicators - measuring the percentage of stocks above their 10-day moving average - ended the week in mildly overbought territory, well short of levels from which corrections reliably develop within a few days, but not far off the heavily overbought readings that triggered the mid Jun reversal.

Meanwhile the week saw the intermediate 50-day moving average indicator gyrate from mildly oversold to mildly overbought, with the rally having commenced just shy of the worst levels mid Apr that nevertheless fell considerably short of the area from which more enduring rallies typically occur. This may yet play out again, but for now the downtrend in the indicator remains intact and gets the benefit of the doubt.



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