Equity Trends: The ratio of S&P 500 stocks in an uptrend versus a downtrend (i.e. the Up/Down ratio) rose last week from an adjusted 8.00 to (408/45=) 9.07. Number of stocksbreaking resistance last week totaled 145 and number of stocks breaking support totaled 4 (including six stocks breaking resistance on Friday and one stock breaking support). The ratio is intermediate overbought, but continues to move higher.
Bullish Percent Index for S&P 500 stocks increased last week from 81.00% to 84.80%. The Index also moved above its 15 day moving average again. The Index peaked four weeks ago and remains intermediate overbought. However, trend remains up.
The Dow Jones Industrial Average added 130.97 points (1.33%) last week. Intermediate trend is up. The Average remains above its 50 and 200 day moving averages. The Average broke short term resistance at 9917.99 implying a short term technical target of 10,430. Strength relative to the S&P 500 Index remains negative. Short term momentum indicators are overbought. An early warning sign occurred on Friday when RSI retreated below the 70% level.
The Dow Jones Transportation Average improved 147.43 points (3.80%) last week despite the spike in energy prices. Intermediate trend is up. The Average remains above its 50 and 200 day moving averages. Strength relative to the S&P 500 Index has been positive since March. Resistance at 4,055.58 set four weeks ago was tested unsuccessfully. Support is at 3,655.77. Strength relative to the S&P 500 Index remains positive. Short term momentum indicators are overbought. Seasonal influences currently are positive.
The TSX Composite Index gained 67.84 points (0.59%) last week. Intermediate trend is up. The Index trades above its 50 and 200 day moving averages. Resistance set four weeks ago at 11,684.55 was tested unsuccessfully. Support is at 10,855.16. Strength relative to the S&P 500 Index remains negative. Short term momentum indicators remain overbought.
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Don Vialoux has 37 years of experience in the Investment Industry. He is a past president of the Canadian Society of Technical Analysts (www.csta.org) and a former technical analyst at RBC Investments. Now he is the author of a daily letter on equity markets available free on the internet. The reports can be accessed daily right here at www.dvtechtalk.com.
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Comments in Tech Talk reports are the opinion of Mr. Vialoux. They are based on technical, fundamental and/or seasonal data that is believed to be accurate. The comments are free. Mr. Vialoux receives no remuneration from any source for these services. Comments should not be considered as advice to buy or to sell a security. Investors, who respond to comments in Tech Talk, are financially responsible for their own transactions.