The QQQQ continues to be the best performer. Prices have broken through a major trend line. All the SMAs are moving higher, the shorter SMAs are above the longer SMAs and prices are above all the SMAs. Finally, prices have continually moved higher. However notice that volume has been decreasing as prices have moved higher.
The SPYs moved though the downward sloping trend line which is technically important. And the price/SMA picture/relationship is still bullish. But note that prices have not moved above their highs established about a week ago. In addition, volume for this rally has decreased as it has moved forward. Finally, prices have broken the upward sloping trend line that started in early March. In other words, there are technical indications the rally is starting to break down.
The analysis for the IWMs is the same as for the SPYs with the added point that the upward sloping trendline that started in early March has now become resistance.
The DIAs suffer from decreasing volume and a petering rally. Notice the SMAs degree of upward movement has decreased. Finally, prices have broken the upward sloping trend line started in early March, have failed to clear the downward sloping trend line connecting price tops and have not moved above the high established about a week ago.
While the Transportation average is still in an upward sloping rally, notice that prices have not broken through key upside resistance. Also note the spikey volume -- traders are not thrilled by this rally. They are moving in in bits and pieces.
From a fundamental perspective I am deeply concerned with this rally. After looking at GDP in detail last week I see little reason to be excited about the possibility of an economic turnaround. As I am detail in this article on the Huffington Post the consumer is still in a terrible place. Business investment has been low for the last 11 quarters and with capacity utilization at 40 year lows there is little reason to add to existing physical plant.
What really struck me was this article from Bloomberg:
Executives and insiders at U.S. companies are taking advantage of the steepest stock market gains since 1938 to unload shares at the fastest pace since the start of the bear market.Gap Inc.’s founding family sold $45 million of shares in the largest U.S. clothing retailer this month, according to Securities and Exchange Commission filings compiled by Bloomberg. Daniel Warmenhoven, the chief executive officer at NetApp Inc., liquidated the most stock of the storage-computer maker in more than six years. Sales by the co-founders of Bed Bath & Beyond Inc. were the highest since at least 2001.
While the Standard & Poor’s 500 Index climbed 28 percent from a 12-year low on March 9, CEOs, directors and senior officers at U.S. companies sold $353 million of equities this month, or 8.3 times more than they bought, data compiled by Washington Service, a Bethesda, Maryland-based research firm, show. That’s a warning sign because insiders usually have more information about their companies’ prospects than anyone else, according to William Stone at PNC Financial Services Group Inc.
“They should know more than outsiders would, so you could take it as a signal that there is something wrong if they’re selling,” said Stone, chief investment strategist at PNC’s wealth management unit, which oversees $110 billion in Philadelphia. “Whether it’s a sustainable rebound is still in question. I’d prefer they were buying.”
Bottom line -- if they saw a bottom right now they'd be buying a ton of stock, not selling.