Saturday, January 09, 2010

Some Non-Confirmations on the Radar

My indicators have sustained their bullish readings, as we've seen 20-day highs exceeding lows; new highs in most advance-decline lines; and over 70% of stocks trading above their 20-day moving averages.

As U.S. stocks have powered to bull market highs (SPY; bottom chart), however, we can see that a number of international equity markets have not followed suit. Those include the Europe/Far East/Australasia (EFA) markets (middle chart) and the China ETF (FXI; top chart). Also not hitting bull highs are ETFs for Germany (EWG), Hong Kong (EWH), and Japan (EWJ).

Interestingly, new 52-week highs remain below their October peak among NYSE stocks. Among the sectors not reaching bull highs so far in 2010 are Financial shares (XLF), Energy stocks (XLE), Consumer Staples (XLP), and Homebuilders (XHB).

Non-confirmations in and of themselves are not sell signals, but they do pose a yellow caution light. I'm especially watching China in light of the recent negative publicity surrounding the country's economy.