Mid-Week Market Internals

Random internal views for a Wednesday morning. Putting pictures to what is normally a color coded written NFTRH segment in order to save space within reports that are routinely over 60 pages.

Here was the view as of last weekend.

nftrh market internals

Moving on to today, the 2yr yield has stabilized and the 10-2yr curve is still steepening on the short-term. The reflation trade lives, if lamely.

2 year yield

The Continuum (30 year yield monthly chart) is above 2.2%. The reflation trade lives, if lamely.

30 year yield

These 3 Amigos are still in bounce mode. The reflation trade lives, if lamely.

10 year yield

SPX New Highs/Lows is ever so slightly fading the rising price. No problem now, but if it continues and intensifies, as in 2018… problem.

spx advance/decline line

As we know the Semis are leading the market, and the leadership within the Semi sector is still on point.

amat

Here’s the still healthy front end of the broad market leadership chain.

semiconductors vs. tech

Consumer Discretionary vs. Consumer Staples is normally seen as a healthy market indicator when it is rising. It is not rising.

xly vs. xlp

Growth vs. Value stocks are normally seen as a healthy market indicator when rising. It is not rising.

growth vs. value stocks

Here is something that is still rising; the back end of the SOX>NDX>SPX leadership chain. It’s healthy.

tech stocks vs. spy

Commodity bulls? Inflation bulls? Not yet fellas.

crb index

It is no coincidence that one of only 2 short positions I hold is FDN (the other is AMZN).

internet stocks vs. tech stocks

The negative divergence in transports to the Dow has been relieved to a degree but is still in play. Mature men in smoking jackets and ascots* sit at attention in well appointed offices. No cognac until after work hours.

dow transports

There is no divergence between SPX and its Advance/Decline line.

spx advance/decline line

Biotech looks interesting as a potential bottom feed on a relative basis to its greater Healthcare sector.

biotech

Financials look even better.

financials

Medical Device has been a leader of its greater H/C sector for years now and so too of the broad market. It is time now however, for MD to reassert its leadership if it is going to.

medical devices vs. healthcare

Here is the median stock of a constellation of 1700 of them. It is very much under performing the headline US indexes.

xvg

Banks/SPX (KBE/SPY) will generally go with the 10yr yield and if they both rise we are on the reflation trade, lame though it has been. In fact, as we’ve noted all along thus far it’s just a bounce and these two are in agreement with that. The bounce is still on, despite the recent pullback.

banks vs. SPX

This is just plain bad signaling beneath the market’s surface if you are a bubble head stock bull who has forgotten the face of your father (old Steven King reference, I think??). But it’s ongoing against the bull backdrop as nominal Junk has remained lofty. Well, it’s now flat lining and not a positive look for the market. Give it time folks, I think we are on a manic finale in this market.

junk bonds

Palladium, Copper and Silver vs. Gold. Draw your conclusions.

palladium and copper vs. gold

SPX vs. Gold. Draw your conclusions.

spx vs. gold

And there you have a mid-week view of some stuff going on beneath the surface of the market.

* AKA Dow Theorists.

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