The Model: The KP Trend Model continues Green, full exposure to US equities.
From the Trading Room: The KP Oscillators continue to be affected by day-to-day internal volatility causing them to fluctuate around their neutral lines. They end the week slightly overbought. This same internal volatility is currently giving the Intermediate-Term Model a boost, moving it solidly north of the sell trigger line deeper into a positive trading zone.
Non-price (“internal”) data generated from trading activity each day plays a large part in the KP International Model and some oscillators. In the huge rally that erupted just after the market collapsed in February 2020, internal data from Nasdaq activity soared well above that generated from NYSE\SPX activity, leading the higher beta Nasdaq 100 Index (NDX) to extraordinary gains. That market move encouraged and rewarded speculation, euphoria and risk taking. It continued through December of 2021. Since January 2022 the internal data has favored NYSE\SPX.
It may be early, but significant that this past week saw the quality of the internal data shift back to focus on Nasdaq and a broadening away from the Magnificent 7 big tech stocks.
