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Sep 12 • 5 tweets • 2 min read
Going thru charts, these 5 stood out:
1. Friday was a 12:1 up day (advancing volume/declining volume) based on NDR Multi-Cap universe. For a double 10:1 up day, we need another 10:1 day because the Aug 10 10:1 up day was negated by the Aug 22 10:1 down day. @NDR_Research 1/5
2. The % stocks >10-day moving averages jumped from 6% on Tues to 86% on Fri. Has to climb above 90% to trigger a breadth thrust. 2/5
3. CPI report on Tues is the big report of the week. Can stocks rally with high inflation? Yes, if it's high *and* falling. The y/y CPI is likely to fall below its 6-month moving average, but in reality this cycle the market has already rallied in anticipation of it. 3/5
4. The 26-week change in the commodity prices fell below 4% for the first time since Aug 2020. 4/5
5. Not everything is rosy on the inflation front. The core CPI hasn't rolled over as quickly. Stocks have risen at a slower rate when the overall CPI has been greater than the core CPI. Perhaps low food and energy prices are good, but inflation broadly contained is better? 5/5

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More from @edclissold

Ed Clissold Profile picture
Aug 29
Going thru charts, these 5 stood out:
1. With all the focus on the Fed, don't forget fiscal policy has been very tight for over a year. The @NDR_Research Monetary & Fiscal Policy Index peaked in March 2021. On y/y basis, it's been getting less bad even as the Fed tightened. 1/5
2. An improvement in gov't policy would be in line with the presidential cycle. Monetary & fiscal policy tends to be restrictive after the presidential election, trough before midterm elections, and accelerate into the presidential election. r/t @WillieDelwiche 2/5
3. Another way to say fiscal policy is tightening is that the deficit is shrinking. From 9.6% to 3.9% of GPD in a yr. Still >75yr avg of 3.0%. Dems blame tax cuts, Reps blame spending. Both are true. Taxes/GDP are 2.1% pts below the LT avg and spending is 3.0% pts above. 3/5
Read 5 tweets
Ed Clissold Profile picture
Aug 22
Going thru charts, these 5 stood out:
1. 50-day MA breadth just missed. Hit 89.66% on 8/16. Breadth thrust is 90.0%. The difference is probably insignificant, but the indicator is built at 90. Close counts for horseshoes and hand grenades, not breadth thrusts. @NDR_Research 1/5
2. Recent weakness is in line with the NDR Cycle Composite. Highs on 8/23 and 9/8 and low on 9/30.
The Cycle Composite is based on historical trends. It's NOT a forecast. The market tends to follow but some years macro forces outweigh it. Trend is more important than level. 2/5
3. @NDR_Research Cycle Composite is the average of the 1, 4, and 10-year cycles. The 1-year cycle posts a summer high on 9/6 and a low on 10/25. I'm giving exact dates but don't get hung up on them. Different number of trading days some months make lining up for 2022 tricky. 3/5
Read 5 tweets
Ed Clissold Profile picture
Aug 15
Going thru charts, these 5 stood out:
Big picture: One of the biggest gaps between bullish technicals and macro concerns I can remember.
1. 89% of stocks in @NDR_Research universe >50-day moving averages, just shy of 90% breadth thrust threshold. Note: $SPX got there (92%). 1/5
2. 50-day breadth signal about now would be right on schedule. Has fired a median of 1.8 months after bear market low, which equates to last Thursday, 8/11, this cycle. Mean of 2.7 months equates to Sept 6, day after Labor Day. 2/5
3. Now for macro concerns:
As much of a positive surprise the July CPI was, less volatile measures rose, including median CPI and trimmed mean CPI. 3/5
Read 6 tweets
Ed Clissold Profile picture
Jul 20
Going thru charts, these 5 stood out:
1. Tuesday was a 17:1 up day (advancing volume/declining volume), the best day since 3/24/2020. Combined with Friday's 11:1, it's the 2nd 10:1 up day in 3 sessions. @NDR_Research 1/5 Image
2. After 2x 10:1 up days within 3 months without a 10:1 down day in between, $SPX has more than doubled its LT average gain 1, 3, and 6 months later, on average. 2/5 Image
3. The % stocks > 10-day M.A. is close to the key 90% threshold. After the March and May lows, breadth improved quickly, but then faded. Given the volatility, confirmation from more breadth thrust indicators would be good. Trust but verify. 3/5 Image
Read 5 tweets
Ed Clissold Profile picture
Jul 5
Going thru charts, these 5 stood out:
1. Q2 was bad. Is that good? After $SPX ⬇️15% in a qtr, it has rebounded sharply. Post WWII⬆️7/8 times next quarter. 2 qtrs later⬆️8/8 by median of 15%. If economy isn't in a deep recession, history suggests stocks rebound. @NDR_Research 1/5
2. Nightmare on Asset Allocation Street. 60/40 stock/bond portfolio posted worst 1H since 1932. 2/5
3. Nowhere to hide outside of commodities. 7 asset classes ⬇️>7% for first time since at least 1981. LC US, SC US, developed int'l, emerging markets, Treasuries, corporates, and REITS. 3/5
Read 5 tweets
Ed Clissold Profile picture
May 31
Going thru charts, these 5 stood out:
1. Last week's rally triggered a couple of breadth thrusts. Here's one based on the 5-day advance/declines ratio, courtesy of the great Jim Stack. @NDR_Research 1/5 Image
2. Friday was a 11:1 up day based on our database of common stocks. That follows one on May 13, but because May 18 was a 10:1 down day, another 10:1 up day is needed for a double 10:1 breadth thrust signal. (w/o a 10:1 down day in between). 2/5 Image
3. The March rally triggered some breadth thrusts, too, so I'm watching for confirmation from some that have been harder to hit lately. The 10-day advances/declines ratio hasn't fired since Feb 2021. 3/5 Image
Read 5 tweets

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