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Thursday, October 18, 2012

Market internals

Since SPX is testing the highs again I think it might be a good idea to peak at some of the market internals and see how they look.

First up is the Summation index.

This one has diverged from price considerably over the last few weeks.  It never reached the strength on the rally since the June low that it has on other rallies.  Look at the strength back in the spring.

This one is the number of stocks above their 200 SMA.

This one is not really telling us much.  It is weaker then it was back at the Sept. peak, but about the same as the early Oct. peak.

This one is the cumulative new high/low indicator.

This one peaked with the early Oct. high and has rolled over a little bit.  I guess we can say it is slightly divergent, but nothing dramatic.  It is in position to turn down for the first time in this rally though.

This next one is the number of stocks above their 40 day SMA.

There is a little more divergence in this indicator.  Clearly a loss of upside momentum here.

Here is the current put/call ratio chart.

This ratio is considerably higher then back in Sept.  There has been some hedging going on the last few weeks.  It is in position to spike up, if the market rolls over.

Next up is the NYSE bullish percent index.

This one is clearly divergent from SPX.  It looks a lot like the Summation index and the COMPX and Rusell2000 indexes.

There are some divergences going on over the last few weeks.  The market has gotten somewhat weaker.  If the market rolls over here we should see a much steeper sell off this time.  With continued upside these divergences will clear up.  Will the bears step up at these price levels for a third time or not?


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