27 August 2020 – Indices, the sky the limit

Summary (The Week Ahead)
$DJT – UpTrend. /YM – UpTrend. /RTY – UpTrend. /NQ – UpTrend. /ES – UpTrend.

The indices continue to trend upward and breakout to new highs.

/CL – UpTrend and in a Squeeze. /GC – Sideways and in a preliminary Squeeze. /ZB – DownTrend. HYG – UpTrend and in a preliminary Squeeze. DBC – UpTrend and in a preliminary.

Junk bond (HYG) is trending upwards and DBC is in an UpTrend. This is a sign that the uptrend is still intact.

$DXY – Sideways and in a Squeeze. EUR/USD – UpTrend and in a Squeeze. USD/JPY – UpTrend and in a Squeeze.

Market Internals
Market Sentiment – Very Bullish. Put/Call ratio – 0.5. Market Breadth – sloping downward showing more losers than gainers. Volume Acc/Dis – sloping upwards and showing accumulation. Vix –23.24. Vix Futures – 27.05. Skew – 145.07.

The indices continued to power upwards. It is likely that we are in an exuberant market where there is too much liquidity. Market Breadth has narrowed and only a few major companies such as Apple are powering upwards.

Relative Strength – Sectors.

On a 3-monthly lookback, the relative strength order of the S&P ETF 500 sectors are /ES, SPY, SPX, XLP, XLK, XLV, XLB, XLI, XLY, XLF, XLU and XLE.

On a 12-monthly lookback, the relative strength order of the S&P 500 ETFs are /ES, SPY, SPX, XLV, XLK, XLP, XLB, XLY, XLI, XLF, XLU and XLE.

Indices/Indexes as of close of 27 Aug 2020

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