World Blog by humble servant. Market Outlook....Fact Base Trading.....The Market Speaks Listen.

Market Outlook:The technical condition of the market deteriorated as the major averages failed at resistance and broke back below key support levels. The technical indicators slipped back into neutral territory for most of the different indexes but remained bullish for the DJIA and small cap Russell 2000. After rising above its 200-day MA last week for the first time since a brief overlap in August, the DJIA was unable to hold that level, and despite Friday's bounce, closed back below it. The S&P 500 failed at resistance at its 100-day MA and fell back below its 50-day MA, but managed to hold 3700, a small victory for the bulls. The NASDAQ underperformed the broader market and nearly erased the October gains before rebounding on Friday. The Russell 2000, like the DJIA, ran into resistance at its 200-day MA and after sliding back bounced off its 50-day MA and closed just above its 100-day MA. There was also deterioration in the different sectors, but they remain mixed. While Energy (XLE) punched a new all-time high during the week, only Healthcare (XLV) remained above its 200-day MA, but Industrials (XLI) and Materials (XLB) still have positive chart patterns. Consumer Staples (XLP), Financial (XLF) and Utilities (XLU) are below their respective 200-day MA but above their 50 and 100-day MA and are rated Neutral. After showing positive divergence the last few weeks, underlying breadth weakened with the NYSE and NASDAQ Advance/Decline lines sliding lower showing stocks are under distribution and the number of new 52-week lows expanded during the week. Investor Sentiment was mixed with retail investors showing a small uptick in bullishness, while the professionals were little changed after increasing exposure to equities leading up to the FOMC Meeting. Cyclical Trend Index (CTI): The underlying premise of the CTI is that the market, as measured by the Dow Jones Industrial Average (DJIA), tends to move in cycles that often resemble sine waves. There are five identifiable cycles, each with different time durations at work in the market at all times. Currently, the CTI is Positive at +10, unchanged from the previous week. Cycles A, B, C are bullish, while Cycles D and E are bearish. The CTI is projected to remain in a positive configuration into December. Momentum Index (MI): The market's momentum is measured by comparing the strength or weakness of several broad market indexes to the DJIA. Readings of -4 and lower are regarded as bearish since it is an indication that a majority of the broader based market indexes are weaker than the DJIA on a percentage basis. Conversely, readings of +4 or higher are regarded as bullish. The Momentum Index is Negative at -4, unchanged from the previous week. Breadth was negative at the NYSE as the Advance/Decline line lost 649 units while the number of new 52-week lows exceeded the number of new highs on four sessions. Breadth was also negative at the NASDAQ as the A/D line fell 2136 units while the number of new lows out did the new highs on each day. Finally, the percentage of stocks above their 50-day moving average eased to 45.7% vs. 48.1% the previous week, while those above their 200-day moving average increased to 27.8% vs. 27.4%. Readings above 70.0% denote an overbought condition, while below 20% is bullish.Momentum Index: -4 -4 Negative. Sentiment Index (SI): Measuring the market's Bullish or Bearish sentiment is important when attempting to determine the market's future direction. Market Edge tracks thirteen technical indicators listed below that measure excessive bullish or bearish sentiment conditions prevalent in the market. The Sentiment Index is Positive at +3, unchanged from the previous week. In addition, we track money flows into and out of Equity Funds and ETFs which as of 11/02/22 shows inflows of $9.6 billion. That's a third straight week of positive inflows.Sentiment Index: 3 3 Positive.Market Posture: Based on the status of the Market Edge, market timing models, the Market Posture is Bullish as of the week ending 10/21/2022 (DJIA - 31082.6). For a closer look at the technical indicators and studies that make up the market timing models.Strength Index - DJIA (DIA): 100.0 79.3 Positive Strength Index - NASDAQ 100 (QQQ): 84.8 77.2 Positive Strength Index - S&P 100 (OEX): 91.3 72.8 Positive Dow Jones Industrial Average (DJIA): 32403.22 32861.80 -1.4% S&P 500 Index: 3770.55 3901.06 -3.3% NASDAQ Composite Index: 10475.25 11102.45 -5.6. Market Timing Models Current Reading Prior Week Connotation Cyclical Trend Index (CTI): 10 10 Positive Momentum Index: -4 -4 Negative Sentiment Index: 3 3 Positive Strength Index - DJIA (DIA): 100.0 79.3 Positive Strength Index - NASDAQ 100 (QQQ): 84.8 77.2 Positive Strength Index - S&P 100 (OEX): 91.3 72.8 Positive Dow Jones Industrial Average (DJIA): 32403.22 32861.80 -1.4% S&P 500 Index: 3770.55 3901.06 -3.3% NASDAQ Composite Index: 10475.25 11102.45 -5.6% *Connotation is Positive or Negative Divergence from the DJIA Momentum Index Components Current Reading Prior Week Connotation *Dow Jones Industrial Averages (DJIA): 32403.22 32861.80 *DJ Transportation Average 13474.08 13574.98 Negative *S&P 500 Index 3770.55 3901.06 Negative *NYSE Composite Index 14702.77 14795.61 Negative *NYSE Advance - Decline Line 499197 499846 Positive *10 Day MA Advance - Decline Line 1.34 1.58 Positive *NDX 100 Index 10857.03 11546.21 Negative *NASDAQ Composite Index 10475.25 11102.45 Negative *DJ Utilities Index 913.01 921.17 Negative *Russell 2000 1799.87 1846.92 Negative Trin - 5 Day Average 1.05 1.10 Neutral NYSE Weekly New Highs - New Lows 188-487 128-756 Positive Zweig Breadth Indicator 0.71 0.76 Positive McClellan Oscillator -157 -291 Positive McClellan Summation Index -433 -1325 Negative Unchanged Issue Index 0.04 0.04 Negative Sentiment Index Components Current Reading Prior Week Connotation Fear-Greed Index - 5 Day Average 57.40 52.20 Neutral Shares Sold Short NYSE - Monthly (000) 16536948 16472273 Bullish NYSE Short Interest Ratio - NYSE Only 2.6 2.7 Neutral Shares Sold Short NASDAQ - Monthly (000) 12558571 12497214 Bullish NASDAQ Short Interest Ratio 2.8 2.6 Neutral AAII Bull-Bear Ratio 0.9 1.0 Neutral Put/Call Ratio - 5 Day Avg All Equity Options 1.07 1.01 Neutral Dividend Yield Spread 2.92 2.69 Bullish NAAIM Exposure Index 55.2 53.9 Neutral Bullish Investment Advisors 35.8 36.9 Bullish Bearish Investment Advisors 37.3 38.5 Neutral Bullish - Bearish Investment Advisors Ratio 1.0 1.0 Bullish VIX - CBOE Volatility Index 24.55 25.75 Neutral.