Market internals expecting a drop

MarketRSI is showing a decided drop in it's recent price momentum. This can be seen on the chart below by following the Black line in the lower indicator. Usually when this indicator hits a peak, the price will drop within a couple of days afterward. This drop is followed by a rise in the lows (as you would expect) and can be seen by a rise in the thin red line (noted on the chart below). A good trade is when the redline crosses the blue line of Highs. Although price on the SP-500 has hardly moved over the last few days, it appears the market is getting tired. The SP-500 with MktRSI is on the following chart:

This drop of momentum can be seen in the Dow-30, NASDAQ-100 and Russell 2000. This second chart is the Dow-30.

 

This chart below is the Russell 2000 index.

  

 And finally you can see the same has occurred in the NASDAQ-100.

 

Klatuu

Read more...

Market internals trade complete

The bullish upmove today started with a shake out and then gathered steam to bring in a decided bullish move. Our MktMatrixHiLo indicator had seen a possibility of this move coming a couple of days ago, so I alerted the readers of this blog. The chart below gives you a description of when the move was made and how much it moved. This indicator is a reliable identifier of this type of move. You can see in the previous post some of it's other trades.

This is a chart of the SP 500 cash index with a closing trade from the MktMatrixHiLo indicator.


Klatuu

Read more...

Market internals indicating a bullish stance

There are conflicts in this market with the Bears throwing down the Bulls more frequently lately than anytime since last March, however, an indicator that picks out swings in the braoder market has a different opinion. It would appear that our own indicator,  the MarketMatrixHiLo indicator, is showing a significant decline in it's lows. You can see this in the yellow line at the bottom of the chart. Correspondingly, the orange line of Highs is coming up from a recent bottom and crossing the yellow line's lows.

Similar to this scenario, I've marked other occurances using the blue vertical lines, showing noted short term bottoms in the market. Those other occurances have  seen sharp declines in both price and the MktMatrix's Low line followed by a steady climb up of the High line over the next two to three days, which has been followed by a corresponding climb in price as well.

The highlighted white center box is a blow-up of the indicator on the lower right corner. Here you can see the SP-500 cash index. While this doesn't indicate the market will stay up, it seems to indicate it we'll have an upward move.



Klatuu

Read more...

MktRSI completed trade

We got our exit signal for MktRSI and it played out like the other historical signals, albeit with a bearish bias. Below is an updated chart of the SP-500 showing the exit signal marked with a vertical blue line. While normally in a bullish market,  we would have seen much more upside, it appears we are in a trend change.

 

Read more...

Market Update 12/31/09

The SP-500 actually had some movement and range on the last day of the year. The last 45 minutes saw a sell off (on very low volume) straight down to the 1114.81 low. With the 1115.10 close its time to execute the next phase of the Short SP-500 index trade discussed in the last few posts.

1. With the pullback there are no more scale-in levels.(Now have 50% of a full position)

2. The Stop will now be 3.34 Points above the 1130.38 Pivot H (=SPX 1133.72 Stop)

3. If we trade below Fridays 1114.81 Low I will bring the Stop down to 1128.65 (1 point above Fridays sell-off High)

4. If SPX trades below 1114.10 ( The previously posted first target.) I will close half the position and continue to trail. I will post levels as they develop.

I now have a very small risk with an opportunity to profit is the index actually has a a normal 3-6% pull back. If we can hit the first target the risk goes to 0 with the decision becoming how much profit am I willing to give up in an effort to make more money. That would be a good problem to have.

As always Good Trading and Happy New Year.
KW

Read more...