LIVE MARKETS-Broader market beaten up, but beacons begin to brighten

ReutersJan 6, 2025 2:00 PM

U.S. equity index futures green: Nasdaq 100 up ~1%

Euro STOXX 600 index up ~0.7%

Dollar slides ~1%; gold down; crude up; bitcoin up >1%

U.S. 10-Year Treasury yield edges up to ~4.61%

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BROADER MARKET BEATEN UP, BUT BEACONS BEGIN TO BRIGHTEN

One measure of the NYSE composite's .NYA internal strength has been hit hard over the last three months or so. However, in the wake of an NYA slide, of more than 7% from its November intraday high to its December intraday low, the internal strength measure is suddenly showing some constructive signs:

The NYSE McClellan Summation is a running sum of the McClellan Oscillator. The McClellan Oscillator is a closely followed breadth/momentum measure based on advancing and declining issues. The Summation peaked on September 30 at a reading of 4,324. It then diverged into the NYA's November peak.

Last Thursday, it hit -1,688 or a more than two-year low. However, the Summation ticked up on Friday for the first time in 18 trading days.

Additionally, this measure suddenly turned up as it neared the support line from its October 2022 trough (that trough essentially coincided with the end of the 2022 bear market).

Bulls will now want to see the Summation build on Friday's turn. A rising Summation can coincide with a return of broader market strength and underpin a renewed NYA advance.

A Summation break of the support line can suggest the potential for much greater NYA internal damage. The Summation's October 2023 low was at -4,308, and its October 2022 trough was at -6,178.

Meanwhile, the sudden up-tick in the Summation on Friday also occurred as another internal strength measure delivered a constructive sign. The Nasdaq New High/New Low index jumped to 41.5% which put it back above its descending 10-day moving average - Click Here.

(Terence Gabriel)

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FOR MONDAY'S EARLIER LIVE MARKETS POSTS:

CHEAP UK STOCKS TO OUTPERFORM, DIVIDENDS AND DOMESTICS STAND OUT - JPM - CLICK HERE

DO YOU WANT CHIPS WITH THAT? - CLICK HERE

EUROPE BEFORE THE BELL: FUTURES UP ON FIRST 'PROPER' DAY BACK - CLICK HERE

MORNING BID: CANADIAN DOLLAR CALM AS TRUDEAU HEADS FOR THE EXITS - CLICK HERE

(Terence Gabriel is a Reuters market analyst. The views expressed are his own)

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