What I mean by that is that I try to see each new week as a fresh opportunity and not carry too much baggage across from the previous week's trading.
Of course you can't just dismiss longer term, and ongoing trends in the market, but you can reassess their impact, and also look at what new trends and information have emerged, which can influence the coming weeks trading. Or which say something about the sentiment or mindset of the market.
Advance vs decline
For example, take this chart which shows data about market volumes in Friday’s session. Note the divergence between Nasdaq and NYSE listed issues.
Sellers had the upper hand on the NYSE with 57.0% of listed stocks declining whilst on Nasdaq 59.0% of stocks advanced .
Look closer and we find that despite the downside bias on the NYSE in terms of issues, when it comes to volumes traded the numbers are much closer together just 66.0 million shares separate the two cohorts.
Source: Barchart.com
Looking at the Nasdaq however, the volume bias is far more pronounced with 2.55 times as many shares traded on the upside than the down: 4.474 billion trading on the upside vs 1.750 billion shares on the downside.
This information doesn't tell us too much in isolation but it's certainly worth being aware of.
New highs and lows
Here is another chart that says something about bias and sentiment in the wider market.
In this case the chart tracks the net number of new 5-day highs and lows in the US equity markets.
What we can see is that the number of new 5-days highs has been rapidly declining and has moved back below the 50-day moving average drawn in red.
Source: Barchart.com
We can also see that the RSI 14 reading for the overall 5-day hi-low indicator has moved below 50.0% not damning in itself, but again worth being aware of.
Trading above or below the 20-day MA
And then what about this chart that tracks the percentage of stocks within the US equity markets that are trading above their respective 20-day moving averages.
I have added a downtrend line to highlight the direction of travel.
And once again we can see this indicator has also moved below its 50-day moving average.
Though for now at least the indicator itself is above 50.0%.
However, the tone and trend of this chart are both bearish imho.
Source: Barchart.com
Staying with this theme here are the percentage of S&P 500 stocks trading above their 20-day moving averages.
Source: Barchart.com
And here is the same indicator for the Nasdaq 100 constituents.
Source: Barchart.com
Note the considerable difference in the headline readings and also the relative positioning to the uptrend lines I have added to the charts.
Takeaway
So what could we conclude from all that?
Well to my mind the takeaway is that the uptrend in the Nasdaq 100 remains in place, though it would be good to see it take out 21626/30 convincingly, if it can do that, it can move higher.
Source: Barchart.com
To my mind the S&P 500 doesn't look or feel as convincing on the upside and we need to watch what happens at 6100, as and when we next test here.
Source: Barchart.com
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