Category: General Blog

Stock Indices Sell Off On Weak Breadth And A News Event

The ADP employment numbers came in this morning twice as strong as anticipated. This led to a market decline supported by breadth. While volume increased somewhat, it will take another thrust with much higher volume for today’s move to become impulsive. The Indices finished the day extremely oversold. Therefore, there may be some type of pause or rotating to work off the oversold condition. On any lower low, breadth should not be diverging.

Stock Indices Recover From Opening Loss

The Stock Indices today opened lower and appeared there was going to be a good selloff. However, they recovered nicely in terms of price development. The problem is the market internals are still not supporting price. Unless there is a news event that strengthens the internal characteristics of the current move, there is risk of a good selloff.

Stock Indices Rally On Expanding Breadth

The Stock Indices continued the rally from Friday. Breadth expanded nicely supporting the move. However, volume declined as they progressed but then increased as there was a slight turn lower. 410 is important resistance in the SPY along with 350 in the QQQ. The Market is slightly overbought but that would not preclude it from moving higher tomorrow.

Stock Indices Decline On Weak Volume

The Stock Indices opened lower today but volume was not confirming the beginning of an impulsive move. On the other hand, market breadth was extremely weak, suggesting internal weakness. The lack of volume signaled the potential for a rotation up and that is what occurred after the FOMC minutes were released. Volume will be the key in identifying the next greater degree time and price move. Until then, the rally off the June 17 low is suspect.

Stock Indices Surge On CPI Numbers

The Stock Indices opened higher today on thoughts the Fed will not be increasing interest rates as high as they have been. Market Breadth expanded nicely but volume still left a lot to be desired. The rally is simply not attracting new buyers and that is concerning. However, price development must be respected. Having closed at the highs today suggests higher prices tomorrow. If that occurs, watch for a divergence in breadth. It will signal a possible rotation lower.

Stock Indices Pause But Divergences Persist

The Stock Indices attempted to move higher today but then faltered. Intermarket divergences exist and the internals did not strengthen today on the opening move higher. While the S&P and Industrials appear to be stronger, the NASDAQ, Russell, and Transports are showing weakness. The market is neither overbought nor oversold. Therefore, what happens in the first hour of trading tomorrow could give us a greater probability of the next greater degree move.