The relative strength of Commodities and Currencies favors higher stock prices.
The Short and Medium-Term Trends
The short-term uptrend is doing well, and I believe a new medium-term uptrend has started. Breadth indicators continue to support the uptrend. New highs are starting to look healthy, and new lows are at harmless levels.
The Bullish Percents are ticking higher nicely.
The BuyWrite Indexes are pointing upwards, and the Dow and SPX BuyWrite Indexes are touching 50-day new highs.
I believe that a new medium-term uptrend has started. More about the medium-term tomorrow.
Commodities, Currencies
Below is the spreadsheet I use to help track the relative strength of the various areas of the general market. Blue is a shift higher, and red is a shift lower.
All of the ETF relative strength shifts were lower. I think it is because the relative strength scores of ETFs that hold stocks has gone up quite a bit over the last two weeks which pushes down on the RS scores on the ETFs below.
In general, I think that when the RS scores of the currency ETF decline like this, it is generally a positive sign for stocks around the globe.
The strength in Energy is also a good sign for global markets, although I am aware that the price of oil currently includes a premium due to global tensions.
Bottom Line: this spreadsheet is generally good news and favors higher stock prices.
I should add that the number of investing themes has increased nicely over the last two weeks. Software, energy and small caps have been added to the leader list based on the categories of ETFs hitting new 52-week highs.
Emerging Markets have dramatically fallen off the list due to recent US Dollar strength, but also due to very scary signs of inflation and defaults, particularly for Venezuela and Argentina.
Outlook Summary:
