The NYSE and NASDAQ held the uptrend. The Value Line index just barely broke to the downside.

The bigger red-flag for the market is that the NYSE and NASDAQ Advance/Decline Lines broke to the downside.

Stock Market Timing Model (MTR-TM): Market Up Signal on 2/17/2010

• MTR-I week over week went negative twice
• RSI trending down but if it bounces off 50 it could be a short term buy signal
• MACD at an extreme level. There was a cross-over signal but MACD cross-over signals are unreliable.
• Volume showed three distribution days. The first day was on the quadruple witching day and volume should have been high that day regardless of direction (up or down).

NYSE & NASDAQ held the uptrend, Value Line broke the uptrend, slightly.

The NYSE and NASDAQ Advance/Decline Lines all broke to the downside. The AMEX ADLine still held the uptrend, but it lags NYSE and NASDAQ.

Stock Market Timing Model (MTR-TM): Market Up Signal on 2/17/2010

• Uptrend slightly broken
• Bigger risks for downside action: 
  • Another distribution day today 3/25 on heavy volume
  • MTR Indicator turned negative
  • NYSE and NASDAQ Advance/Decline Lines broke to the downside
  • Earliest time for a forecasted MTR-TM Market Down signal will be for Monday 3/29

NYSE and NASDAQ Advance/Decline Lines broke to the downside on Wednesday 3/24

The markets closed a volatile week with the major indexes reaching new highs for the 2010. Last week the markets hit an indecision point and that was evident in the price action when a Gravestone Doji appeared. The underlying trend of the market, including the Advance/Decline Lines were still bullish, but the price action was a concern.

Stock Market Timing Model (MTR-TM): Market Up Signal on 2/17/2010

• Value Line Arithmetic Index reached a new high for 2010 
• MTR Indicator is bullish (> 0)
• RSI bullish (> 50)
• RSI reaching oversold levels (70+). This can indicate a market retracement is due or flat trading
• MACD bullish (> 0)
• If the market pulls back it can be an opportunity to add to positions. A pull back would have to be accompanied by the Advance/Decline Lines holding support.

All the major indexes had bullish breakouts to the upside and reaching new highs.

The Advance/Decline Lines (ADLines) for the major indexes continued the uptrend. All broke out to new highs except NASDAQ. If the ADLines hold support on price pullbacks would indicate the uptrend had strength.

MTR Economic Model (MTR-EM): Update with January 2010 Data

Year over Year (YoY) real-wages (Green Line) are down almost -8% compared to last year. Secondly employment levels (Blue Line) are down further.

The primary concern is the continued deterioration in real-wages. Even if unemployment levels are high, if real-wages are up YoY consumers will spend and this will support economic growth and stock prices follow. The MTR-EM shows that consumer spending will slow since YoY real-wages have fallen substantially.

The MTR-EM can be seen as a leading indicator of what can be expected in 3 to 6 months in the market. Since the MTR-EM has continued a downward trajectory it ties into the outlook from Ned Davis Research that the market will trend downward in Q3.