Money flow and volatility

We set up swing in the open market and then reject, as I expected yesterday. However at 11 A.m. the indexes ahead began as US dollar began to decline. If you present US dollar index and S & P-500 index compare, see your trends are exactly the opposite. As mentioned several times, it looks like current stock market investors U.S. dollar look trend.

Flow on money: money flow continues to negatively on the hourly charts to stay. Today's it ahead not significantly affected.On 30 and 15 min charts who it was positive (I have mentioned yesterday, I would see these diagrams) .Dennoch, money is in 5 min chart flow negative again always.

Overall, from the potential money flow I would say that the most important sentiment (hourly chart) be further weak in addition we may tomorrow at the market open (5 min chart) .If done decline and we see, change into the River to 15 - and 30-min chart he maybe we have some strong decline.

Other things to consider is:

-The ETFs already deleted after the market close and have already down werden.so traded index EMINI futures probably we weak opening tomorrow.

-The US dollar index close is its high seen on October 19 and 27 October, 2010.If this level is, broken many traders may, that the US dollar no longer down trend is. for greater decline in the stock market might additional fuel.

-There are not many economic reports, most likely the trend mainly through technical analysis over the next few days is inspired (not surprises should be).

-Over the past few trading days, we have an increase in Volatilität.Ich will reduce bar set to avoid intraday technical indicators to a situation "if it is too late" on most of my time

View the original article here

Low Volume and Volatility

Another week of bullish trading and indexes (S&P 500, Nasdaq 100 and DJI) have climbed close to their January 2010 highs. In my "Money Flow" post on March 1, 2010 I wrote "I would say that results of my technical analysis are still Bullish and I see good odds of market moving higher. On the other hand, there is a possibility of volatile side-way trading in the same range the stock market is now". This exactly what happened this week - three day of flat, side-way trading and then up-move to the January's highs.

On January 31, 2010 in my "Technical Analysis" post I have talked about coming reversal and on February 4 and 7, 2010 in "NYSE Advance/Decline" and "S&P 500 Chart" I confirmed that the market hit the bottom. In one of my posts I mentioned that at that time the market was strongly oversold and it had power to climb back to the November-December 2009 flat levels and then to the January 2010 highs.

As a rule, when I look at the longer-term charts, I'm not trying to where the market is going to be in a month or two. When a trader (technical analyst) is trying to say where the market is going to be in a month he/she could run into situation when he or she can become relaxed and miss some important and critical events. I look at charts every day (during the trading session and after the market close). When I look at longer-term charts I have made a habit do not analyze where the market /indexes or stock could be in a month but rather say how strongly overbought or oversold market is and what is currently moving longer-term trend. I'm not stating that everybody has to do it, yet on my own experience I found that this is the best way to come to the longer-term charts and longer-term trends.

When somebody tells you that his technical analysis results tell him that the Dow Jones Industrials (

View the Original article

High Volume and Volatility

Last week (see "Low Volume and Volatility" post on March 7, 2010) I have talked about possibility of flat trading as indexes come to the January 2010 high levels. Now the indexes are at those levels. The past week could be considered slightly positive (the indexes gained modestly over the week), however we may see slow tuning into sideway trading. Actually, that DOW Jones Industrials (

View the Original article

Volume and Volatility

It's nice to be right. In the last two paragraph on my last report (see "Volume and Advance Decline Post" on Sunday April 18, 2010) I mentioned "...the stock market ... does not crash suddenly ... It is custom to see side-way trading and increase in volatility ... I would assume that we may see the indexes moving back to their recent highs. The volume surge during the Friday's decline itself may push indexes higher. The third factor pointing to possibility of rebound up is critically low advance/decline volume and ratio reading on Friday 16, 2010 ... I do not expect Friday's decline to grown into strong correction, at least not at this time."

The indexes (S&P 500, Nasdaq 100, DJI and others) have not just bounced back to the most recent highs, but many of them run over by hitting new high levels.

At the current moment many investors (I guess) asking for how long and how far will the up-rally (started in the first half of February, 2008) go? I bet many traders (including me) expected down move in the March 2010 during the side-way trading (see the "Resistance Corridor" post on April 3, 2010). Yet, the market continued its rally - that is why it is recommended to be sometimes a little bit more conservative (see last three paragraphs of the same "Resistance Corridor" post).

Now, by the end of the week many technical indicators remain positive by suggesting good odds for further up-move. Stochastics and RSI are above 70 and 80 lines respectfully. Advance/Decline volume and issues are positive as well. Money Flow indicators remains positive as well.

Despite all the positive indicators, there are two things that are worth paying attention to: high daily volume over the last two weeks and increase in volatility. The last two weeks of trading (starting from April 13, 2010) has been supported by high daily volume: huge volume surges during the April 13-15 up-move, even stronger volume surges on April 16 when indexes dropped down and still strong high volume surges during another strong up-move on April 17 - until now.

The second negative factor is an increase in volatility. As a rule increase in volatility suggests bearish mood and usually higher volatility is witnessed during a decline. This is not a good thing to see market rising on high volatility... At the current moment volatility raised to the level it was in January 2010 (during correction down). And increase in volatility on high volume during up-move is not very good sentiment...

Even technical analysis results suggest good odds of further up-move, because of high volume and increase in volatility, I would be very cautious. If volatility continues to grow or stay on the same level and we see sudden strong drops and strong bounces up, then I would expect to see a correction which could be stronger that the one we had in January 2010.

P.S. For monitoringVolume, Advance/Decline data and volatility for major US indexes and Exchanges (NYSE, S&P 500, DJI, Nasdaq 100, Russell 2000, etc) I would recommend visiting MarketVolume.com web site.

Posted byTraderJoeat11:46 AM

View the Original article

Volume, Advance Decline and Volatility

I have decided to make a quick post - something that I usually do not do during the week. As a rule, I update my blog during week-ends, yet, there is some stuff on my opinion worth mentioning.

I would recommend checking three things:
a) today's daily volume on indexes (Nasdaq 100, S&P 500, DJI and others);
b) advance/decline issues and volume readings on the S&P 500 and NYSE;
c) volatility level on indexes (the same set - Nasdaq 100, S&P 500, DJI)

You may try to compare today's decline with decline we had on April 16, 2010:
1. The same as on April 16, we had very high volume surges during the indexes' decline, yet these volume surges are not as big as those that we saw on April 16, 2010 (today's volume signal is weaker).
2. The same as on April 16, we had today extremely low advance/decline issues and volume readings on the S&P 500 and NYSE indexes, yet today's readings were much lower (more extreme - today's advance/decline signal is stronger).
3. Current volatility is growing and is higher than we had on April 16, 2010.

The first two points above would suggest bounce up which could be similar to the one we had after decline on April 16, 2010. The last point (volatility) suggests that we could be on an edge of a strong correction. I think, there will be a reaction on the first two signals (volume and advance/decline signals) as some up move. I would not try to guess now how strong this up-move could be. If I do not see an up-move reaction then I would not expect to see a strong correction.

Posted byTraderJoeat10:49 PM

View the Original article

Volatility

During the week I had an unscheduled post. Something that I do not usually do, yet signals were very nice. I mentioned there: "suggest bounce up which could be similar to the one we had after decline on April 16, 2010 ... there will be a reaction ... as some up move. I would not try to guess now how strong this up-move could be. If I do not see an up-move reaction then I would not expect to see a strong correction." (See "Volume, Advance Decline and " post on April 27, 2010).

We had bounce up. It was not as strong and not as prolonged as the bounce after April 16, 2010, however up-move on April 29, 2010 was quite strong and many indexes (Nasdaq 100, Dow Jones Industrial, S&P 500, etc) bounced up, close to their highs seen on April 26, 2010. The current bounce up could be considered very nice from the "Correction" point of view. The reaction on high bearish volume surge and oversold advance/decline readings (seen on April 27, 2008) was strong and short-lived (indexes bounced down on April 30, 2010) - in other words - very volatile. Overall, the past week have added to the and right now the level is quite bearish.

In general, since April 12, 2010 the stock market could be considered in the volatile side-way move. Taking into account , I would assume that the odds are on the side of the development of a correction down. Big bullish money flow since the end of February 2010 has pushed the stock market into overbought condition and it is in the favor of correction down. Many of technical studies point to correction as well. I think, if the indexes go below lows seen on April 28, 2010 it could be as another confirmation of correction.

There is only one thing that makes me cautious - this is high volume during the side-way volatile trading that we have been seen since April 12. It looks like there are two big institutional forces fight each other: one institutional "big money bag" is trying to push market down by selling at high levels and another institutional "big money bag" starts to buy in huge volumes as soon as indexes drop a few percents down. Big volume always indicates actions of big players, and there is no doubt (for me) that now, we see in actions these big players. However, if before they were playing together, it looks like now they are playing against each other. It difficult to say who from them will win, yet it looks like, since Friday’s decline was on lover volume, that bearish traders are taking over.

It is difficult to recommend anything right now. You cannot set tight stop-loss in such volatile market - it could be eaten very easily. The only thing I may recommend is watching technical indicators, review your position at least on daily basis and adjust it in accordance to new coming volume, and advance decline data.

Posted byTraderJoeat6:20 PM

View the Original article

Volatility still Up

As expected, we had a strong bounce up from the oversold levels.

I will be short:

Today's rally up is logical reaction on high volume surges during May 6-7, 2010 decline.

The good news is that today's trading session daily volume on all indexes (NYSE Composite, Nasdaq Composite, S&P 500, DJI, etc) is lower than the daily volume we had on May 6-7, 2010. We may see changes in the money flow toward positive readings. Many technical indicators became bullish suggesting a possibility of further recovery.

Not very nice news is that the volatility remains on high level and still is raising. Today's advance was quite strong - we have not see such strong daily gain since 2008th stock market crash. Because of that, Even I consider that the odds on the side of up-move, I would be very cautious and I would not be strongly bullish until I see some decline in volatility.

Posted byTraderJoeat10:14 PM

View the Original article