03.31.2009

Market Rewind had a great tweet today... "VWAP as resistance - Hedge Fund Remptions meet Mutual Fund Window Dressing" Seems like it!

At any rate, quick recap:

Here is the TICK. Really strong all day long until the end. Much like the market. The TICK is a great intraday measure to watch.

Next take a gander at the TRIN:

Here I'm showing two day's worth of data (I also clip out 8:30 - 8:50 AM CST data) - yesterday (where the trend was up on wild bars) and today which traded in a tight range at the low end until a relative pop at the end. With the TRIN, a downtrend or a tight low range is nice and bullish; any kind of uptrend, however, is bearish. The TRIN is basically a measure of downward pressure in terms of volume.

Next let's look at SPY intraday:

What this looks like is a nice easy ABC correction off the top. In this chart, the thick black lines are a few of the fib confluence lines I could discover and then a measure of the first leg down projected from the 5 day MA (the heavy pink line). I've got potential targets at 77.61, just over 77, just under 77, and then down around 75.50 - 70. Notice too the RSI has rolled off the high end of the range and is now floundering around down in the bearish end of things. Same with the CCI. That last volume spike is also larger than any spike in the rally to date on this timeframe. Now I do not think that the rally is dead. Nor do I think it is alive. Nor do I think we are safe from the low-lows, and I also don't think breaking the highs is out of the question. At this point *anything* is possible. At any rate, it sure looks like more downside is coming in the immediate term.

Here we also have a couple of other sell signals I was watching that confirmed at the close (price reversal combined with momo trend reversals denoted as diamonds in this chart):

Also noteworthy is that these same momo indicators registered the first sell indicator on the daily (i.e. the momo trend has reversed at least for now).

So there you have it. The rally has finally pulled a real correction, or at least it appears that way. How far down is anyone's guess. My personal opinion is that this stock market is going to bore a good deal of people away as it grinds out a trading range for a while.

My closing thoughts are the potential head and shoulders on the Q's:

(oddly enough today I followed my charts but thought SRS would be a good bet since IYR has been relatively weak... I ended up out of SRS at breakeven because IYR actually held its 5 day, at least on a closing basis - what was I thinking!?!?!! All this work that panned out and instead I went of in lala land.)