NYA NYSE Composite Weekly Chart with 40-week MA that Would Signal a Cyclical Bear Market

Long time followers of Keystone know that his two fave indicators that determine a cyclical bull market versus a cyclical bear market are the SPX 12-month MA cross and the NYA 40-week MA cross. If you were on a desert island but could pick only one indicator to know what the stock market is doing, it would be the SPX 12-month MA cross and that remains firmly bullish.

The NYA 40-week MA is no slouch. It is an extremely important stock market indicator. In 2022, stocks were beaten like a rented mule, and then late in 2022, the NYA 40-week MA positive cross started the long party higher to the present. 

All good things come to an end and the NYA is teasing a potential failure at the 40-wk MA at 17484. If it fails, the blood will be flowing on Wall Street, severe carnage, folks will be in panic mode. It's fun.

The banks are playing a key role in stock market direction currently. Keybot the Quant algorithm calls out XLF 41.96 as a key bull/bear line in the sand. The XLF exploded above 42 this morning carrying US stocks on its back but then it fell on its sword at munch time and stocks fell apart from there. The XLF is creating stock market bearishness ending the session at 41.55.

This is important since banks, financials, insurance companies, credit card companies, have tried to recover and head higher to help the stock market on Friday, Monday and today, and all three times have failed to end the day lower. Folks, there is a problem at the banks. We do not know what it is as yet. But there is likely a problem with the banks based on the XLF action.

The XLF 41.96 key metric is explained because it and the NYA 17484 tell the stock market story going forward. If XLF rallies above 41.96, perhaps the fourth time is the charm, stocks will rally and the move higher will have further legs higher. If stocks rally but the XLF does not move above 41.96, the bulls got nothing, and any joy in the stock market will develop into misery with equities rolling back over to the downside.

If NYA loses 17484, Goodnight Irene, Irene Goodnight. There will be a big drop in stocks with serious panic occurring. It is always fun to see the rats scurrying.

Easy-peasy. Stock market bulls need XLF 41.96 or they have no hope. Bears need NYA 17484 and the blood will be flowing like water on Wall and Broad. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added Thursday Morning, 8/8/24, 11:24 AM EST: US Jobless Claims pull back a touch on-week so the dollar/yen pair drops (yen strength) and US stocks pop and it is party time. XLF was hesitant at the opening bell but is now printing 42.12 with the bull/bear line in the sand at 41.98. It is a game of pennies. The SPX is up almost +100 points as the XLF pushes higher. Bulls came to play today but they must keep the XLF above 41.98 or there will be Hell to pay. NYA floats higher to 18136. Watch the XLF 41.98 rudder that is steering the stock market ship. XLF tags 42.15. Wheeee! Whoopie! Bulls are throwing confetti while chugging Fed wine. Today is 8/8. Chinese folks love their 8's; it is perceived as a lucky number; it is so far, for bulls, but what about bears?

Note Added Friday Morning, 8/9/24, at 2:51 AM EST: The bulls are walking around with their chests puffed-out pushing XLF up to 42.22 with the line in the sand at 41.98 still only 24 pennies away. The stronger financials send US stocks higher. The NYA rallies to 18186. The drama continues.

Note Added Saturday, 8/10/24: XLF wins the day ending the week at 42.40. Bulls win. NYA floats higher to 18267. The battle continues. Keep watching the saga next week. The bull/bear line in the sand for XLF is at 41.99 so bears need a 41 cents drop in XLF (-1%) to usher-in stock market weakness. Watch the banks and financials pre-market to get a feel for the story ahead.