Midday Check on Market Internals for Sept 15
Let’s take a quick look at the current (12:00 EST) market structure and market internals, using the SPY as our proxy.
What we’re seeing is a TradeStation screen capture showing the SPY 5-min chart, 3/10 Momentum Oscillator, NYSE TICK (overlaid), Up-Volume and Down-Volume comparison (bottom left), and finally the standard Breadth (Advancers and Decliners).
A quick check of market structure shows a bullish price bias (higher highs and higher lows, along with price being above the 20 and 50 EMA, and those both sloping positively in a bullish orientation). However, the “higher high and higher low” structure seems to be cracking, with price making a lower low then a lower high – price appears to be in ‘rotation’ mode so a more guarded/conservative stance is warranted.
The intraday (morning) price highs were not confirmed with a TICK or Momentum high – in fact, both formed a negative divergence as a doji and long upper (candle) shadows formed at the morning highs.
There is an ever so slightly bullish (above zero) bias to the TICK as shown.
For most of the morning until when this chart was captured, Down Volume (red line in bottom left graph) was higher than Up Volume which had clearly bearish undertones, though at noon, Up Volume was ever so slightly greater than Down volume.
Breadth – the Advancers vs Decliners on the day – showed a Positive Bias (more stocks in aggregate ‘advancing’ (positive) on the day vs those ‘declining’ (negative) for the day). That bias only widened as the day progressed.
At the top left superimposed on the chart, we see the AMEX Sector SPDRs in the Sector Rotation model lay-out. Quickly, the “Aggressive/Offensive” sectors are positive on the day (Technology, Materials, Retail/Discretionary, Industrials, Energy… with the exception being Financials) and the “Defensive” or “safe” sectors (Staples, Health Care) are quite negative… that orientation is bullish.
Conclusion?
As long as this structure continues, the market internals – especially Breadth – are showing a slight edge to the upside.
As is the caveat with these posts, monitor price and internal action all day long, as this is only a quick mid-day snapshot in time.
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade
Thanks Corey….The midday updates are beneficial. It compliments nicely the lessons taught in the Idealized Trades report.
btw, Post from this morning: http://implicittrading.blogspot.com/2009/09/i-l…
Thanks BalaB! 🙂
I'll try to keep doing these mid-day posts – I just worry that a quick snapshot cannot do justice for a day that is particularly volatile.
Nice charts you have there – I especially like the Market Delta chart shown from Ninja Trader.
Keep up the great work!
Thanks Man…
” I just worry that a quick snapshot cannot do justice for a day that
is particularly volatile.” – IMO, what's more important is
acknowledging the frame work of the day thus far.
Looks like the probing of rally highs and prior level of significant
selling volume (1047.25) didn't produce a short covering burst.
Snicker…..
Re: Market Delta……I'm trying to see how divergence forms within
these charts to get a deeper understanding of the buying/selling
dynamics intraday
Good point – the market has traveled higher since this post was written and internals are even stronger.
I think shorts are so defeated they're just hanging back instead of trying to be aggressive (which has resulted in these quick “stop-pop” bursts up). You can only get beat so long.
Great point about the Market Delta – I don't use that but would certainly find it valuable at key expected intraday turning points.
Thanks Corey….The midday updates are beneficial. It compliments nicely the lessons taught in the Idealized Trades report.
btw, Post from this morning: http://implicittrading.blogspot.com/2009/09/i-l…
Thanks BalaB! 🙂
I'll try to keep doing these mid-day posts – I just worry that a quick snapshot cannot do justice for a day that is particularly volatile.
Nice charts you have there – I especially like the Market Delta chart shown from Ninja Trader.
Keep up the great work!
Thanks Man…
” I just worry that a quick snapshot cannot do justice for a day that
is particularly volatile.” – IMO, what's more important is
acknowledging the frame work of the day thus far.
Looks like the probing of rally highs and prior level of significant
selling volume (1047.25) didn't produce a short covering burst.
Snicker…..
Re: Market Delta……I'm trying to see how divergence forms within
these charts to get a deeper understanding of the buying/selling
dynamics intraday
Good point – the market has traveled higher since this post was written and internals are even stronger.
I think shorts are so defeated they're just hanging back instead of trying to be aggressive (which has resulted in these quick “stop-pop” bursts up). You can only get beat so long.
Great point about the Market Delta – I don't use that but would certainly find it valuable at key expected intraday turning points.