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Friday, May 17, 2013

Daily update 5/17

The bulls showed up today in force.  Here is the daily SPX chart.


SPX made it slightly above the upper channel line again.  Something is wrong with the volume in this chart.  Today had bigger volume then yesterday.  According to my stats in Tradestation volume was 25% higher today.  That would be normal for an option expiration.  Today could be a volume climax.  It is always hard to say when it happen on expiration day because the volume is high anyway.  I remember we had a volume climax low on an expiration Friday last year.  I think it is a pretty good possibility because the market is really over bought now.  When I updated the sector status I found 11 of the 16 sectors were above the upper Bollinger band on the weekly charts.  In the time I have been doing this blog there have never been that many at the same time.  SPX is also there.  Here is the weekly chart.


I marked the last two times SPX closed above the upper Bollinger band.  Last Sept. it led to a bit of a correction.  This year it was more of a pause as the market traded sideways the next few weeks. 

Here is the SPY 30 minute chart.


Look at all that volume at the end of the day.  Despite price being extended people really piled in.  I am pretty sure this is going to turn out to be a volume climax short term top.  I will be expecting a pullback early next week.

Have a great weekend all.

Bob

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