Overview of Major Indexes

May 31, 2007: 10:29 PM CST

We have survived this ‘heavily ladened’ week of economic reports, and the S&P along with the Dow Jones have made new lifetime highs.  Such action is impressive when reports indicate that first quarter GDP grew at 0.6%, or the worst reading since 2002.  We still have one trading day ahead of us before the weekend.

Dow Jones

dow-may-31.png

  • We are making new price highs, yet momentum (both 3/10 MACD and Stochastics) are clearly diverging now with price
  • Volume on the last 3 up-days was clearly decreased – consequently, volume on today’s ‘down’ day was markedly increased

nasd-may-31.png

spx-may-31.png

All indexes are showing clear and present momentum divergences.  A divergence is no reason to run for the hills and short, but it is a yellow light of caution.

Here’s a bonus chart of AAPL (Apple) which has absolutely been on a roll since late April.  It is now making new momentum highs.
aapl-may-31.png

Study well.

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