Swing Charts and Quirky GOOG Chart

May 21, 2007: 10:16 PM CST

Attached is the most recent “swing” charts and market-structure charts for the major indexes and also the quirky action I observed in Google today.

First, as a teaser, here is the Google Action (15m bars):

goog-quirk-may-21.jpg

Notice how price quickly rallied from $467 up to $480 before falling right back to $470. For pure day traders, this was heaven (provided you were on the right side – most likely not both ways) and for swing traders, this nailed both short stops and profit (long) stops most likely. Otherwise, it was just quirky!

Now for the index charts (weekly):

dow-may-21.jpg

nas-may-21.jpg

spx-may-21.jpg

On the Dow and the S&P 500, we are making (obvious) new price highs and new momentum highs, yet we are trading at the upper end of the Keltner Channel (which is indicative of strong trends).

The Nasdaq is making new price highs, but not new momentum highs which serves merely as a warning/caution (and no reason to short).

Notice the steepness of the angles (changes in angular momentum) of the S&P and the Dow. This recent upswing was far stronger (and quicker in duration) than the previous upswing.

The angular momentum in the Dow is particularly alarming – it’s as if we’ve reached new highs at break-neck speed and wonder where fresh buying power will arise to drive to newer highs.

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