DAY HAGAN TECH TALK NOVEMBER 14, 2017

 

SUMMARY

Near-term technical divergences suggest that the Large Cap universe may be heading toward a short-term period of consolidation and/or a pullback. Many areas, including Small Caps, have been doing so for the past few weeks/month. However, the divergences are not yet enough to change our supportive, non-trading domestic equity market outlook. Consistent with this, minor tactical support for the S&P 500 (2584.84) exists at 2566, with a more substantial tactical support range between 2544 and 2540. A one-year uptrend line comes into play at approximately 2525.

In order to “add some color” to the comments above, as well as to my observations from last week’s “Global Macro Economic and Technical” webinar, please review the charts of a few internal equity market measuring tools:

Chart depicts since mid- to late-October, the average S&P 500 component is not rallying to the same degree as the mega-cap components of the index.  In other words, fewer stocks within the Large Cap S&P 500 universe are rallying, similar to what is happening in o ther areas of the market. 
Percent of NYSE Stocks Above 50-Day Moving Average. From my experience, this indicators is NOT a good "timing" tool. However, it confirms the previous chart. Specifically, fewer stocks have been participating in the recent rally. 
NYSE Common Stock Only Advance/Decline Line. A single non-confirmation between these two, as is currently the case, would suggest the odds favor a consolidation/pull back. A series of non-confirmations would suggest the odds favor a more substantial decline. NOTE: a similiar non-confirmation occured between the SPX and the "Traditional" NYSE A/D line.

Have a wonderful week, and please know that Day Hagan Asset Management appreciates your support!

Art Huprich, CMT
Chief Market Technician
Day Hagan Asset Management

—Written 11.13.2017. Chart sources: Stockcharts.com.

Print Copy of Article: Day Hagan Tech Talk November 14, 2017 (PDF)

Disclosure: The data and analysis contained herein are provided "as is" and without warranty of any kind, either expressed or implied. Day Hagan Asset Management (DHAM), any of its affiliates or employees, or any third-party data provider, shall not have any liability for any loss sustained by anyone who has relied on the information contained in any Day Hagan Asset Management literature or marketing materials. All opinions expressed herein are subject to change without notice, and you should always obtain current information and perform due diligence before investing. DHAM accounts that DHAM or its affiliated companies manage, or their respective shareholders, directors, officers and/or employees, may have long or short positions in the securities discussed herein and may purchase or sell such securities without notice. DHAM uses and has historically used various methods to evaluate investments which, at times, produce contradictory recommendations with respect to the same securities. When evaluating the results of prior DHAM recommendations or DHAM performance rankings, one should also consider that DHAM may modify the methods it uses to evaluate investment opportunities from time to time, that model results do not impute or show the compounded adverse effect of transactions costs or management fees or reflect actual investment results, that some model results do not reflect actual historical recommendations, and that investment models are necessarily constructed with the benefit of hindsight. For this and for many other reasons, the performance of DHAM’s past recommendations and model results are not a guarantee of future results. The securities mentioned in this document may not be eligible for sale in some states or countries, nor be suitable for all types of investors; their value and income they produce may fluctuate and/or be adversely affected by exchange rates, interest rates or other factors.

Investment advisory services offered through Day Hagan Asset Management, an SEC registered investment advisory firm. Accounts held at Raymond James and Associates, Inc. (member NYSE, SIPC). None of the entities listed here in this disclosure are affiliated.