Broad Market Internals, week beginning October 21, 2013  
Volume contracted modestly last week, and remains unseasonally soft. Best areas were Mobile Telecoms (for the ninth straight week), Internet (for the fourth straight week), Household Durables, IT Svcs, and Environmental.

Breadth was roughly in line after generally having lagged since mid Jul consistent with the LT trend. 52wk highs ended the week at a marginal new 3yr record, albeit only confirmed by Oil & Gas and Telecoms, with the best concentrations in Integrated Oil & Gas, Mobile Telecoms (for the 4th straight week), Insurance (again), Oil Equip & Svcs, Business Svcs, and Fixed Line Telecoms.

Short term indicators - measuring the percentage of stocks above their 10-day moving average - have rallied to the most extreme overbought levels since Jul well within the range from which ST downside reversals reliably develop within a few days.

Meanwhile the intermediate 50-day moving average indicator has also crept back into extreme overbought territory, but the LT 200-day indicator remains some distance below the Jul +2yr record. This implies that one of the recently discussed key non-confirmations of new broad market index highs remains in place, while the same is arguably also true of 52wk highs given the narrowness of the participation in the new aggregate 3yr record on the week. The broad market remains in the area for a major cyclical top which is likely in the process of forming.



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Broad Market Internals, week beginning October 14, 2013  
Volume was higher for the third straight week but overall remains well below normal levels. Best areas were Autos & Parts and Mobile Telecoms (both for the eighth straight week), and Internet (for the third straight week), Fixed Line Telecoms, and Biotech.

Breadth again lagged on the week as has generally been the case since mid Jul consistent with the LT trend. 52wk highs ended the week around 3/4qtrs of the best levels mid Sep that in turn amounted to around 3/4qtrs of the May 3yr record, with the best concentrations in Integrated Oil & Gas, Mobile Telecoms (for the 3rd straight week), Leisure, and Insurance.

Short term indicators - measuring the percentage of stocks above their 10-day moving average - bounced from extreme oversold territory midweek - well within the range from which ST upside reversals reliably develop - to end the week heavily overbought, only fractionally shy of extreme territory.

Meanwhile the intermediate 50-day moving average indicator snapped back from mildly oversold levels Tue to end the week heavily overbought, back within striking range of levels from which longer term declines usually develop from. However, the indicator has become increasingly unstable since the spring, and this could be a precursor to a longer term change in trend which would fit with the cyclical position and the failure of both the LT 200-day indicator and new 52wk highs to confirm the mid Sep broad market highs.



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Broad Market Internals, week beginning October 7, 2013 
Volume was modestly better week on week, but remained well below the better readings mid Sep with the month as a whole registering the worst tally since ’07. Best areas were Autos & Parts and Mobile Telecoms (both for the seventh straight week), and Internet (again), and Specialized Consumer Services.

Breadth lagged on the week reverting to the general theme since mid Jul consistent with the LT trend. 52wk highs ended the week around a 1/3rd of the May 3yr record, with the best concentrations in Oil & Gas Producers, Mobile Telecoms (again), Chemicals, and Internet, while the lows remain near negligible and recently well contained.

Short term indicators - measuring the percentage of stocks above their 10-day moving average - continue to trend lower from extreme overbought levels mid Sep, Wed in mildly oversold territory some distance off levels from which ST reversals reliably develop from, while the recently more important 25-day indicator remains mildly overbought.

Meanwhile a new momentum high in the intermediate 50-day moving average indicator Tue implies that the uptrend just about remains intact, but a couple of redraws confirms that momentum has recently been very tepid. Furthermore with key non-confirmations of the mid Sep highs in terms of the 200-day indicator and new 52wk highs now in place, a top of some importance is likely forming or already in place.



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Mid Week Subsector Performance Update, October 2, 2013 
The impact of the government shutdown has so far had little impact on subsector preferences, with the market seemingly as blase as the political protagonists.

In particular the failure of Noncyclicals Household Nondurables - notwithstanding the warning in Unilever - and Food & Beverage to see some relative strength in this environment is surprising, but potentially indicative that the process of capitulation may be unfolding.



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Broad Market Internals, week beginning September 30, 2013  
Volume pulled back significantly from the relatively healthy levels from the preceding week, but remains comfortably above the dismal levels seen during Aug. Best areas were Autos & Parts and Mobile Telecoms (both for the sixth straight week), and Internet.

Breadth was fractionally better after generally having lagged since mid Jul consistent with the LT trend. 52wk highs ended the week near negligible after at the best levels earlier in the month falling over a 1/4qtr short of the May 3yr record, with the best concentrations currently in Media, Personal Goods, Mobile Telecoms, Pharma, Internet, and Autos & Parts.

Short term indicators - measuring the percentage of stocks above their 10-day moving average - have declined back to neutral territory after hitting extreme overbought levels each of the 2 preceding weeks, with the recently more important 25-day indicator also seemingly rolling over from extreme overbought levels hit a week earlier.

Meanwhile the uptrend in the intermediate 50-day moving average indicator just about remains intact, but a minor lower low is now in place. Overall the recently dominant 8wk cycle in the broad market is in a position for a possible top, and if this is now occurring without key indicators such as 52wk highs and the percentage of stocks above their 200-day moving average having confirmed the midmonth record high it likely spells a top in the LT 15m cycle, where the next low is expected mid Q1.



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