Over the 1 year, 7 month timeframe of the above chart, the WIlshire 5000 is up 34%, the NYA is up 22%, SPY is up 39%, and IWM is up 15%. The issue is in what they represent, and what their main components are.
Strikingly, IWM has SMCI as its major holding right now.
I have often mentioned the IWM/SPY ratio chart. You can see from the bottom 2 charts above that they have not been in sync over the period covered in the chart, and the ratio has suffered in light of that. However, it is near a low that has held over the last 6 months. Correlations are not causations, and Price is what causes this ratio, nothing more. I’ve pointed out recently that I expect this ratio to remain fairly static, and I continue to feel that way until it offers us a break of the upward resistance line, or the low of last November. The chart can be seen on the site.
The balance of this post is a review of some of the charts available on my site. While I expect next week to be an important one, it will be on low volume, which may create some distortions.
Looking at the Advance-Decline Chart on my site, you can see that the A/D line has come down from its overbought area, striking the 20 day EMA and reversing back higher on Friday.
The Bullish Percentage BPSPX has created a sell. Watch to see if the middle Keltner line becomes support.
The Simple Chart shows Breadth and Volume Momentum to have stalled, and are in the area where they will either kiss, and return to upward momentum, or cross, and define growing weakness in equities.
We had a major peak in the Nasdaq A/D Volume chart, but it barely budged the price of QQQ. That is concerning.
While I haven’t mentioned it for a while, the Confidence Index has moved below its 21 EMA, and has not been able to pass it. That projects some concerns in the spread between Junk and Treasury bonds.
BPGDM, or the Gold Miners Bullish Percentage is still on a buy.
While the basic Volume Oscillator of T-Theory tried to create a Complex Bullish signal, you can see that the VO peak failed to pass the peak of early March. That is not strength. The McOsci is still below its zero line.
Remember that T Theory is not meant to be used as a tool for shorting, but it does let you know when there is excessive strength in an asset. That is not what we have now.
Stay safe.
T-Theory Thoughts 