[JimStudent]

Ok, as I am learning to interpret these charts, this is what I see. We know there is a correction underway but because we the percentage of stocks above the 150 day moving average is at 61.93 - there is still health in the bull trend. Things can change and maybe we are near a top but we don't know yet. What am I missing?

[isatrader]

Ok, as I am learning to interpret these charts, this is what I see. We know there is a correction underway but because we the percentage of stocks above the 150 day moving average is at 61.93 - there is still health in the bull trend. Things can change and maybe we are near a top but we don't know yet. What am I missing?

You seem to be getting to grips with it. Remember to look at the breadth indicators as a whole, and don't only focus on one, as it's the "Weight of Evidence" approach that Weinstein recommends, and why I show a broad range of measures. So analyze what the majority is saying.

I'd agree with your analysis of the current situation, as although there's short term weakness, the medium term indicators have not yet gone into full bear mode (although this could happen quickly), and as you correctly noted the percentage of stocks above their 150 day moving average is still in the upper half of the range, although has weakened significantly over the last few weeks, so caution is advisable, as well as the long term Bullish Percent Index moving to Bear Confirmed this week, which is a sign to be more defensive, as to use an American football analogy, the market now has the ball in it's own half of the field and is trying to score against you. So you need to put your defensive team on the pitch to protect the gains you've made. Which back in the real world means being cautious, raising cash levels, focusing on quality, tightening stop losses etc. i.e. defensive strategies that will protect you in case it does turn into a bigger downturn, but will still keep you in the game if it's not and turns out to be another pullback in this long Stage 2 advance.

[isatrader]

The S&P 500 has pulled back to retest a weekly swing low for the first time in over a year and in doing so has formed the first two parts of a potential head and shoulders pattern. So I’m changing my Stage rating to Stage 2B- / 3A, as although not officially yet in Stage 3A, it’s right on the edge of moving into Stage 3A and touched the 30 week weighted MA this week. So a weekly breakdown below the recent lows would confirm the change to early Stage 3A imo.

So it's a critical time for the S&P 500 ahead, although if it does breakdown then there should be some support at the 200 day MA were institutional investors / fund managers like to buy, which lines up with the highs of the summer range which also should provide some support. But if it rebounds here then the 50 day MA is the first hurdle imo.

[isatrader]

Attached is the updated major equity index charts and relative performance table.



US Stock Indexes

               

European Stock Indexes

       

[isatrader]

Attached is the updated major commodities charts, Gold (GC), Copper (HG), West Texas Intermediate Crude (CL) and the Dollar Index (DX).

[isatrader]

Attached is the updated US 10 & 30 Year Treasuries charts.

[isatrader]

Attached is the US Sub Sectors ordered by the weekly percentage change. To see the full list sectioned by major sector, with links through to individual stocks in each sector, go to: http://stockcharts.com/freecharts/indust...ECTOR_SPDR

[isatrader]

Attached are the updated US Major Sector Charts and relative performance table.