Sunday, April 12, 2009

The S&P600, Russell 2000, And S&P400 Produce Very Strong Gains On Higher Volume Above The 50 Day Volume Average; Leading Indexes Continue To Lag Badly

Stocks ended the holiday-short week on a very positive note but by now everyone knows this. If you guys do not have a real-time stock market intraday tracker for the general market, I really recommend that you use a delayed candlestick version like the one on finviz. These intraday candlestick charts are the highest quality I believe on the web. Now, obviously, if you have any kind of real-time platform you have access to nice intraday charts but for those out there using a delayed broker that do not like the charts they provide or for those just learning about the stock market, these intraday charts of the DJIA, SP 500, and Nasdaq are a must to get to know.

Why? Well a lot of individuals do not realize that how an index trades intraday is actually and extremely valuable way of knowing what the pros are doing. We already know if we have a day where the indexes close higher on higher volume that that is good while when we have an index close at the LOD with volume higher that is bad. However, this EOD analysis while very important and a must for me to make a smart decision about the trend of the market is in fact only a start sometimes. Other times, it is open and shut like the market opens, barely rallies, starts to selloff, and closes flat to slightly higher or lower. No big deal.

However, other times, like on March 25th for the Nasdaq the intraday action can tell me a lot more than it can most. During that day (I do not have the data in front of me) the market was rallying but lagging stocks like banks, real estate, and other clear beaten up weaklings were making the way higher. But before the session could end stocks took a dump lower and appeared that they would close at the LOD. However during the last hour and especially I believe the last 5 to 10 minutes stocks took off with not only all stocks gaining but leading stocks taking the reigns for the first clear time of the rally attempt. This showed up as an amazing intraday move.

Since then, Nasdaq only, we have seen some great tight session with strong closings that I believe all inexperienced and experienced should get used to spotting if we are going to have an uptrend work. Now some of these indexes do not have volume data on some providers so I have to go look at Telechart's SP 400 and SP 600 to determine the rally. At the same time I need to use Daily Graphs to get a gauge on the IBD leading indexes. The bottom line from all of this is that it is very important to know when the market is moving up with volume during uptrends.

Like I was saying, some examples from the Nasdaq include 3/10, 3/12, 3/17, 3/18, 3/23, definitely 3/25, 3/26, 4/1, 4/2, and now 4/7. These closings and intraday reversals have helped put the Nasdaq on top as far as top markets are concerned.

Other indexes have had nice sessions on the daily and weekly patterns the past five weeks but by far the Nasdaq has taken over. The nicest indexes on Friday that I have been waiting since the rally started to see them get going are the SP 400 and SP 600. It has been a long time since I have seen these indexes put in those kind of moves.

Sadly the indexes that continue to lag are the IBD 100 and IBD 85-85. The really sad part is that this deep into the rally, by now, these leading indexes should be leading the market higher.

I will be going over more of how to read charts for subtle clues on if the market is going higher and of going lower.......


PART ONE (10:30):

PART TWO (8:00):

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