Thursday, June 17, 2010

Sitting on a Signal

Below are updates to the pair of graphs I've used recently to observe price trends. First is the S&P 500 index 6 month history line. The red horizontal line is on the 1103 possible support level. I am also showing an upper line at the 1151 mark as possible resistance. Since the last post, the Bollinger Band (not illustrated) lower band line has move to 1045 from 1039, the mean line is now at 1084, dropping from 1092, and the upper band line is sitting at 1123. Volume continues to be weaker on up days than volume on down days. The second graph illustrates the number of companies in the S&P that are trading at a price higher than the 150 day moving average for the company. It can be viewed as an early signal of a developing rally or the tail of a dying rally. Bottom line, I'd really like to see big volume on an up day. Big, like a 25% increase from present volume levels. It's not a number I want, it is a sense of enthusiasm from the market.