Dividend Digest 270, March 11, 2015
Trading volume was relatively light on the NYSE with 750 million shares changing hands. The Advance-Decline (A-D) line was positive but the number of stocks making new 52-week lows was unacceptably high at 85 (versus only 53 new highs). Since there were far more than 40 new lows the conclusion is that internal selling pressure hasn’t quite yet abated. Therefore traders should continue to approach this market cautiously and hold off on making any new commitments.
The short-term directional components of our Hi-Lo Momentum (HILMO) indicator have been reflecting the internal weakness in the past few days. Here’s what the components look like as of Monday: the bottom line is the directional indicator, the middle line is the momentum bias and the top line is the internal trend indicator.
My interpretation of these three indicators is that the market’s main short-term currents are basically neutral. This implies that we could end up with a continuation of the sideways market trend for a while longer. Until the short-term HILMO indicators synch up once again on the upside we’ll need to prepare for the volatility that normally accompanies a trading range environment.
Cliff Droke, Momentum Strategies Report, www.cliffdroke.com, 707-282-5594, March 9, 2015
