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Stock Market Indicators – February 9th, 2016

09 February 2016

Here are the latest readings from our proprietary stock market indicators.  The market has been decidedly negative lately.  Pretty much since the day after the Fed decided to raise rates.

The short term oscillator is reaching oversold levels once again.  It is showing a positive divergence from the low reached around 1/16/2016.  This is a good sign as long as the current readings stay above that level.

SmashTrades short term stock market indicator

SmashTrades short term stock market indicator

The medium term indicator is showing similar characteristics.  The major indices are near their lows from mid January while the medium term indicator is still about 10% higher than it was at that point.  Some stocks are showing strength.

SmashTrades medium term stock market indicator

SmashTrades medium term stock market indicator

The long term indicator is still above the levels reached in February of 2008 and August 2011.  It is oversold when comparing it to pretty much any time from the past seven years.

SmashTrades long term stock market indicator

SmashTrades long term stock market indicator

Perhaps the stocks pulling up the medium term and short term indicators are the gold stocks.  They have been decidedly outperforming the market the last month.  Using GDX as a proxy for the broader market of mining stocks, they appear to have broken out of this downtrend since 2011.  We’ll have to see if this is a headfake or a real change of character.

gdx_2-9-2016

Gold has also broken out of its descending trendline since 2011.  It has broken through its 200 day moving average, but is starting to get slightly overbought with its RSI reaching levels only seen a few times during the historic run-up of 2010 and 2011.

gold_2-9-2016

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