A Look At Some Interesting S&P 500 Index Market Internals (INDEXSP:.INX, SPY)
Corey Rosenbloom: If the bulls were any stronger, we’d be seeing a straight up rally in the market!
Let’s take a quick morning look at the interesting situation in S&P 500 Index (INDEXSP:.INX) Market Internals as price continues to defy expectations at the highs.
S&P 500 30-min intraday perspective:
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We’re focusing on two Market Internals Indicators: NYSE Breadth and VOLD (Volume Difference of Breadth).
In general, strength in Breadth (particularly coming off a recent low or support zone) tends to precede a future rally in price (reference July 13, July 27, and August 3) while divergences between Price and Breadth often precede pauses or retracement/reversals (like July 19 and July 30).
While Breadth and VOLD (and volume itself) have been declining steadily, price (buyers) seem not to have noticed. GET A FREE TREND ANALYSIS FOR ANY STOCK HERE!
The IF/THEN Logic continues to call for bullishness above 1,400 (particularly 1,410) and caution/bearishness under the 1,395 support line.
Instead, price continues consolidating/trading at the high of the range, not just on the intraday frame (see 15-min chart below) but on the Daily S&P 500 (NYSEARCA:SPY) Chart.
Let’s zoom the perspective to the 15-min chart to highlight the current situation:
The 15-min chart emphasizes the mid-July divergence and reversal situation which has not yet repeated itself with the current divergence-into-resistance situation.
In general, the longer price continues defying the odds, eventually the odds tip to the bullish side given the resilience of buyers to hold this market up at the highs, or the inability of sellers to push this market lower.
Price still moves by supply and demand, not indicators, and the potential still exists for a power breakout to the upside via “Popped Stops/Short-Squeeze” just as the expected downside resolution exists.
The trigger points continue to be 1,410 to the upside (targeting 1,422’s new recovery high of 2012) and the recent support shelf at 1,395. GET A FREE TREND ANALYSIS FOR ANY STOCK HERE!
Bias (demanding that price must break higher or collapse lower) has no place in the current environment – study the key levels and adapt accordingly, even if price doesn’t seem logical at all.
Written By Corey Rosenbloom, CMT From Afraid To Trade
My name is Corey Rosenbloom, CMT (Chartered Market Technician) trader, educator, analyst, and I am excited to share with you my experiences studying and trading the markets and to hear from you regarding your experiences, challenges, and frustrations, and successes. My goal is to create a community dedicated to reaching out to those who have been burned by the market or are anxious about risking their money to make money in the stock, options, or futures markets. Together, we can share strategies and learn how to overcome crippling fears that keep us from achieving our highest potential.
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