Intraday Market Internals Showing Strength Jan 26

Jan 26, 2010: 11:41 AM CST

For the moment, things are looking brighter for the buyers/bulls, at least according to the intraday SPY 5-min chart when a bullish trendline break accompanies a strengthening in key market internals.

Let’s take a look at the recent potential bullish developments.


(Click for full-size post)

What we’re seeing is a continuation of the “Update on Market Internals” post I wrote yesterday.

We see a bullish Trendline Break (that occurred mid-day yesterday) which was accompanied by a strong support bounce (‘throw-back’) this morning off the upper side of the trendline.

That’s a bullish development that can precede at least a short-term reversal back to the upside… particularly if price stays solidly above the most recent “Double Bottom” lows at 1,090.

A bullish posture would be solidly confirmed if price can rise above the 1,094 resistance level as seen from yesterday’s trading (it was the Confluence Fibonacci Level as mentioned in this morning’s SPY post).

Beyond price levels and trendlines, we see a positive posture developing from Market Internals such as the Breadth, TICK, and Volume Difference.

While price purely tested the intraday lows from Friday at 1,090, all market internals were clearly higher, in the following:

Friday’s Lows  ….   Tuesday’s Lows

Breadth:  -2,077   ……    -1,515
TICK Low:  -1,429   ……  -680
VOLD:   -1,184,735  ……  -28,177

Remember, price is testing the same level but all internals are reading improved values – that is the X-Ray inside the market (when price is not enough).

As such, it’s a bullish message here, so likely shorts are going to be covering with nice profits while buyers are going to try some ‘bottom fishing.’

A bullish posture is thus favored while price remains above 1,090.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

3 Comments

3 Responses to “Intraday Market Internals Showing Strength Jan 26”

  1. terlyn Says:

    What do you think about that two-day double bottom?

  2. terlyn Says:

    What do you think about that two-day double bottom?

  3. Stock___Market Says:

    I read your post . it was amazing.Your thought process is wonderful.
    The way you tell about things is awesome. They are inspiring and helpful.Thanks for sharing your information and stories.
    Stock Market