MARCON Blue
F-Fund: Condition Red, AGG took a significant slide down to a 28% reading. This is slightly oversold, I'd consider it close to orange, but still red. We've already outlined how the 6-month window shows AGG to be in a dominant downtrending bear market, and this continues to be the case. However, within the white circle is a 36-day uptrend. Unfortunately this uptrend has been damaged with a 69% retracement from the 10 February low to the 16 March high. As a cautionary note, I've been outlining a hypothetical Head & Shoulders (H&S.) Last Friday prices closed below the March 3rd left neckline. That being the case, this could form a right-neckline declining H&S, meaning it has potential for a larger decline. But this is just a hypothetical cautionary note and MARCON does not weigh chart patterns.
C-Fund: Condition Blue, with a 72% reading, the S&P 500 has yet to meet or break through the previous 18 February top. You might start hearing folks say this market is overbought, well I'm here to tell you it's not, or at least the S&P 500 isn't. Looking at the MTV (momentum, trend, volume) indicators we can see there is still room left to the upside.
S-Fund: Condition Green, with a lip-smacking 92% reading. With a new 6-month high, the old yellow line is now the new green line. I've also created a quadrant-channel, dividing the rising channel by 5 lines separated by 25% increments (0%, 25%, 50%, 75%, and 100%.)
Moving on, there are two things I want you to know. #1 (the good news) the Transports have a 92% reading, combine this with the Wilshire 4500 and you have the potential to go embedded to the upside, pulling up everyone else with it. #2 (the bad news) The last time we got a reading this high was at the 18 February high. What followed was a significant pullback.
I-Fund: Condition Blue with a 72% reading. Interestingly enough, both EFA & UDN gave the same reading this week. On the last blog we spoke of the green trendline on UDN weakening, this week it finally broke down. In the meantime we've drawn in a blue trendline to show support at the next best price level.
Take care...Jason
