Archive for June, 2009|Monthly archive page

Nervous In Front Of Employment Data

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Volume may be light but it qualifies as Distribution.

That means seller’s were laying it on heavy as evident from volume taking out yesterday’s count.

Maybe hands are nervous in front of Employment Data due Tomorrow.

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Potential To Shake Things Up

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Like a beach ball, it’s not hard to move the indexes on light volume.

Monday’s rally was a fluffy one.

With many heavy hitting funds out for the holiday shortened week there won’t be a whole lot to analyze here.

But Wednesday’s employment data release still holds potential to shake things up.

Where The Volume Goes

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Another light volume day with mixed performances for the major indexes.

The trend for the last two weeks has been bearish.

We expect to see this pullback go lower. Whether it stalls or picks up speed on heavier volume has yet to be seen.

Our bets nearly always go where the volume goes.

Expecting More Of A Pullback

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Wishy-washy action on indexes reminds us it’s summer.

When all the big players take a break volume tends to drop off.

While the Dow and Nasdaq were down a bit, the S&P 500 was positive.

There’s little to make of it.

We’re still expecting more of a pullback to lower prices.

Encouraging For The Bulls

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Major sell-offs on the indexes, but not major volume.

As the S&P 500 pulls back to its 50-day moving average this should actually be encouraging for the Bulls.

Where one day means little in the grand scheme of things, a continuation of less interested sellers would be a sign of the Bear losing its thrust.

Stay tuned.

All We Can Make Of It

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A little bounce off the 200-day moving average is all we can make of Thursday’s action.

With a couple of Distribution days, where volume heavier than the previous day is attributable to selling, it’s not the time to start new Long positions.

Cautious Market For Buyers

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Two days of increasing sellers’ volume could be dangerous.

The major averages were little changed Wednesday.

The S&P 500 is wrestling with support at its 200-day moving average.

How well it holds up here depends on how well institution-grade buyers want to defend it.

Chances are the market will see lower prices in the coming weeks, given the summer season’s harshness for stocks.

But let’s let the market speak for itself.

Until the heavy unloading of shares eases it’s a cautious market for buyers.

Know When It’s Right

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The pullback continues… but today’s volume suggested a correction may be heavier than anticipated.

If we get a couple more down days where volume exceeds the previous day’s we’ll change our bias to Seller’s Edge.

It’s a day-by-day ongoing analysis here. We never know what the market will throw at us next.

The idea is to know when it’s safe to swim or not. Or in our case, know when it’s right to be long, short or flat.

The Way It Works

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Big downside move on the major indexes. But lack of volume is like less thrust available for follow through.

Nevertheless, we anticipate the the S&P 500 will sell-off to its 200-day moving average.

That would also fill the gap (air pocket in price action made from a higher open on the chart) made two weeks ago.

We mentioned several posts ago that it was just a matter of time until it gets filled.

To a novice the concept sounds bizarre, and we won’t argue. But the reality is that’s the way it often works.

Successful trading is about lining up winning odds in your favor.

One Day Weighs Little

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Distribution struck Wednesday.

For those who don’t know that means institutional grade selling.

But as long as prices on the major indexes hold above their 200-day moving averages it’s difficult to be Bearish.

One day weighs little in our outlook.

But we keep it in perspective that volume often leads price-action.