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fib_1618

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With many of the breadth measures now highly "overbought", a pause to refresh would certainly be welcomed. However, with our moving above the longer term declining tops line in the NYSE Composite breadth MCSUM that goes back to the May 2013 highs this past Thursday, a challenge of an even more important declining tops line that goes back to February of 2012 is likely to occur this coming week. That line intersects around natural resistance at the +1000 level on the current ratio adjusted chart.

The U.S. market's 5 week winning streak finally came to an end this holiday shortened week as the major market indices closed down by an average of .99% from last weeks settlement, with the broadest based weakness coming from the small caps arena which was down by an average of 1.93%.

Looking over this weeks cumulative breadth charts shows a mixed picture where some lines broke their patterns of accelerated rising bottoms from their February lows, while others continued their bullish biases to the upside - especially in the interest rate sensitive areas. In fact, the recent strength in the Investment Grade advance/decline line has now pushed PIMCO's Investment Grade Bond Fund (CORP) to new all time price highs since it started trading in 2010. With money continuing to search out areas that will provide the greatest amount of total return of investment capital in an era of negative interest rates in both Europe and Japan, it's really no wonder why the NYSE Bond CEF and NYSE Preferred advance/decline lines continue to move to new all time highs on a weekly basis, with the added beneficiary of higher equity prices that comes with that in the not too distant future.

The price of gold (-3.13%) and silver (-3.95%) took a hit this week as commodities, in general, took a well deserved pause as the price of West Texas Crude Oil (-3.74%) broke its 5 week winning streak that encompassed nearly 30% in total gains. We do note, however, that this weeks declines in both gold and the XAU index were not confirmed by either of the Precious Metals or XAU advance/decline lines leading to the downside. Because of this positive divergence between breadth and price, last week's pullback would then be considered corrective in scope, and from where a technical bounce in prices is likely to be seen to correct this inconsistency as soon as next week.

Over in Europe, this past week's bombings in Brussels had its greatest effect on French traders as the CAC advance/decline line broke solidly below its rising bottoms line, while over in Germany and England, the DAX and FTSE advance/decline lines held their own nicely in a week of fear and panic. With a holiday shortened week extending to both the Australian and Indian markets, we'll have to wait until next week to see if any of the ill effects felt in Belgium, no less the Iraqi bombings of Friday, reverberates itself to those markets that are still thousands of miles away from the action.

So with the BETS hanging on to its +20 reading from the week before, the combination of reaching both natural and longer term trendline resistance at the +1000 level on the NYSE Composite breadth McClellan Summation Index looks to had been enough of a challenge to where our long expected pause to refresh is now getting underway. With a large menu of economic statistics to be released next week, including ADP on Wednesday and the unemployment picture on April Fool's Day, the technical expectation is for choppy, volatile trading as prices consolidate their month long gains, with any surprises having an upside bias. Further expectations of a better buy point for both investors and traders continues to remain valid for around the second week of April, but we should have a better grasp of what we can expect going into the second quarter of this year by the time we meet up again next weekend.

Have a great trading week!

US Equity Markets:

[breadthspx032516]


[breadthdjia032516]

[breadthspec032516]

[breadthpre032516]

US Interest Rates:

[breadthtnx032516]

[breadthig032516]

[breadthjunk032516] 

US Real Estate:

[breadthreit032516]

Precious Metals:

[breadthpm032516]

[breadthxau032516]

Australia:

[breadthaus032516]

England:

[breadthftse032516]

France:

[breadthcac032516]

Germany:

[breadthdax032516]

India:

[breadthbse032516]

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