Monday’s S&P500 Buy/Sell Strength…A Divergence
Despite the index rising .9%, there was pitifully anemic buying and selling today. Â What is surprising to me is not the lack of sell strength, but the apparent frugality of buyers. Â A reading of 33 is very low for nearly a percent up, so there is clearly some breadth divergence going on here. Â Index plods along, stocks themselves aren’t heavily bought = this should soon be resolved by a color change in price.
One possible cause was Friday’s Russell rebalance, but given the numerous measurements this indicator is making it is not likely that that event was the sole contributing force to Friday’s unsual strength or today’s unusual weakness. Â If the market continues to run we could get a push towards 963-975 in the next two weeks, however, should we take out 880, we will probably at least test 830-850.
On another note, chalk up Friday’s post “…Extremely Unusual Action” as a win, 16:19. Â As I made clear, though the trade was “high probability” I would trade it per se, but did influece my decision making today, especially since after about 10 AM EST is was worse than watching the paint flake off of an abandoned Riverside row house.
Brett also has a tiny blurb here:
http://traderfeed.blogspot.com/2009/06/weaker-on-up-day-what-next.html
that references MarketTell’s observations, but it’s just more pieces of the puzzle that we all have started to put together–We have to get past this lousy EOM, and this beast has to break one way or another. GS/JPM/UBS should get this rolling after the holiday. I’m also watching those 2-3 tiles that may complete a H/S this week.
Thanks MS.
It is nice when they all agree, indeed.
Danny, I am seeing similar divergences on the internal indicators I track. What is the candlestick color coding based on? I used to do a different candlestick color coding that ended up with grey sticks when it was not bull or bearish. What is your white stick based on? I like it.
seriously.
they should just open the market for 1hr each day. all this middle of the day crap is just a waste of time.
Just open the market for like 10 mins every day. Let funnel action reign supreme.
Fly - use your sway. I am down for a 10m market. I think we all would be.
Nah, fuck it, 20 mins.
6:30 - 6:40
12:50 - 1
_________________
Caveman - candlestick coloring is based on a snazzy code. White is neutral (i.e. indecision) green = bull, red = bear. It is coded of totally different parameters than the other indicators, to seamlessly fit as much info as possible on the chart
Danny, thanks. Good to know it is independent of the others. Any hints as to what the stick color coding is based on?
Mine was simple, I had a scheme based on the price action only. For each day (week or whatever the stick timeframe is):
Bullish (green) - higher high and higher low over previous day
Bearish (red) - lower high and lower high over previous day
Neutral (grey) - some mix of the two such as a lower high and higher low, etc.
Simple enough it was but it made some interesting charts that gave a nice extra intuitive feel to the strength of the underlying trend.
I can’t but it is similar in concept to what your doing, but more so (i.e. more lookbacks)