Stock Market Early Morning Insights – March 7, 2016

TECH TALK… This is the 2nd webinar on the HGSI Volume Price Analysis Suite of Indicators. “HGSI VPA Support and Resistance Lines” Wed, Mar 9, 2016 4:30 PM – 5:45 PM EDT  REGISTER HERE

A Volume Price Analysis (VPA) Look at 4 Stocks-March 5th, 2016 by Ron Brown- VIDEO 

There is no doubt that stocks are overbought in the short term. The slices of accumulation of the industry groups shows that 17% have “A” accumulation, 72% have “B” accumulation, 9% are neutral and only 2% are in the D distribution area. I rounded these numbers to the closest percentage, but they are overwhelmingly positive. Also, the industry groups have an 88% positive 2 Day Force Index and a 95% positive 13 Day Force Index. You will find the images toward the bottom of this report.

The NASDAQ 100 and the NASDAQ composite both hesitated on Friday, and both formed a Doji which is a candle of indecision. Many stocks in groups tried to push higher on Friday, but by the end of the day had given their intraday gains back; thus a Doji was formed in these indexes. The S&P 400 and mid-cap and the S&P 600 small-cap indexes did not follow this pattern as a powered higher on heavier volume to form white candles. Volume was also heavy for the NASDAQ composite.

 A look inside the S&P 400 and the S&P 600 shows that many banking stocks along with utilities and oil exploration stocks were the primary driving forces behind these indexes. The utilities, a mostly defensive sector, continue to show so much strength. This is clearly evident at the sector level which had a 5 to 1 advancing issues over declining issues.

On Friday, the technology sector was at the bottom of the list with only 1.23 advancers to every decliner. This is reflected within the NASDAQ 100 and the NASDAQ composite charts. If this market is going to continue higher, I would expect more money to flow into the more speculative technology stocks. It is not that they are not positive, they are, but not as positive as the defensive utilities stocks. The 30 year US treasury bond futures were down on Friday, and again this morning, which means that yields are on the rise. Falling bond prices should be good for stocks, but stock index futures are negative this morning as I write this. This chart shows the relationship of bonds in the form of the TLT, to utility stocks as represented by the XLU. Generally, but not always, as bonds fall and yields rise, yielding utility stocks rise.

ABOUT STOCK MARKET EARLY MORNING INSIGHTS

Stock Market Early Morning Insights is a product of Ron Brown Investing. The complete report and all the charts are produced daily before the market opens and distributed by email to subscribers. Reports published on the HGSI Blog are delayed and do not contain all the charts.  For more information about subscribing use this link. MORE INFO