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Wednesday, October 17, 2012

Daily update 10/17

Here we are again with SPX closing above 1460.  It failed to stay there the other two times.  Will the third time be the charm or not?  Here is the daily SPX chart.

Look at the volume.  Up three days in a row on increasing volume.  Is that panic buying?  The linear regression channel has a pretty severe negative slope.  Will price be able to stay up here?  Will people keep piling in at these higher prices?  I want to show you something on the 195 minute SPY chart.

The big red volume bars were dominant into the June low.  Big green volume bars became dominant after that up until the FED QE announcement.  Since then the biggest volume bars are all red.  That looks like classic distribution.

Here is the NASDAQ daily chart.

The COMPX is severely lagging SPX.  It also failed the break out over the spring high.  A lot of people watch the relative relationship between these two indexes.  This looks like risk off.

One more chart to look at is the Russell2000 index.

We can see that this index looks just like the COMPX in the way it is lagging.  It also failed the break out over the spring high.  There is another level of divergence in this index.  It never did get above last years high, only this springs high. 

With the plethora of poor earnings reports and key indexes lagging it seems like it will be difficult for SPX to break out and really go higher here.  I guess we will see.

Chart practice has been updated with GMCR the stock for today.


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The information in this blog is provided for educational purposes only and is not to be construed as investment advice.