[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]

[RT] Fw: Current Market Outlook



PureBytes Links

Trading Reference Links

Title: MarketVolume - Profit with Simple System
this was send free
look at all bearish divergences
Ben
bellow 4 charts
----- Original Message -----
Sent: Thursday, April 02, 2009 7:00 AM
Subject: MV: Current Market Outlook

 

 

Read Current Market Outlook

Dear Ben,

We are enhancing our services and adding new studies (indicators) to our charts...

Advance Decline Line, TRIX, Standard Deviation

Once again, MarketVolume® is one step ahead of the competition. Right now, our development team put the finishing touches on our new Indexes charts. MarketVolume® is the only source of real-time intraday index volume and advance / decline charts for major US indexes and exchanges. Now, we are raising the bar even further. From now on you may monitor Advance Decline Line  for U.S. indexes and Exchanges.


Advance Decline Line

Advance Decline Line is one of the well known breadth indicator in technical analysis.  Initially Advance Decline Line (AD Line) has been applied to NYSE (New York Stock Exchange), yet, we are the first who started to provide this technical indicators for other indexes and exchanges which allows to use AD Line to analyze smaller stock market sectors.

As with all other breadth indicators AD line could be applied to the basked of stocks only and is based on the Advance/Decline Issues, however we are the first who started to apply the Advance Decline Line formula to volume of advances and declines as well as we are first who started to monitor AD Line on intraday charts.


Below you may see the S&P 500 advance decline line and advance decline volume line.

Chart 1: S&P 500 index - Advance Decline Line.

S&P 500 index - Advance Decline Line.

TRIX and TRX 2 Line

TRIX displays the percent rate-of-change of a triple exponentially smoothed moving average of a security's closing price in order to eliminate price movements that are insignificant to the larger trends by reducing price volatility.

Below you may see S&P 500 60-day (1 bar = 1 hour) chart example of using TRIX indicator in hypothetical trading system that generates "Buy/Sell Signals" on crossovers of TRIX and zero line around which TRIX oscillates.

Chart 2: S&P 500 index - TRIX.

S&P 500 index - TRIX.

Another way of using TRIX is to use it with "Signal Line". On the chart below (see chart #2) you may see example of TRIX trading system that generates signals on TRIX and "Signal Line" crossovers.

Chart 3: S&P 500 index - TRIX 2 line (Signal Line).

S&P index - TRIX 2 line.

If you compare chart #1 to the chart #2, you may notice that with the same setting the second trading system is more sensitive and may earlier spot trend reversals. However at the same time the second trading system would generate more signals and as a result probability of fake signals is higher. Furthermore depending on the trading style one trader may prefer using TRIX while other may select TRIX with "Signal Line".

Standard Deviation

The Standard Deviation is used in technical analysis and trading systems to measures stock's volatility statistically by showing the difference of the prices from the average one. Normally, this indicator is used as a constituent of other indicators.

One of use of the Standard deviation is to confirm the down-trend and up-trend. As a rule, during the up-trend the market is less volatile while during the downtrend and market crashes we may witness high volatility which is caused by panic selling.

In trading systems Standard Deviation (as other volatility indicators) is used to define periods of the volatility and adjust used technical indicators setting to it. It is well know that in high volatile market the price trend changes faster and trading system should react on the signals faster, otherwise it could be too late to open/close a trade. At the same time in low volatile market a trader may set the trading system to generate signals with delay to avoid situation of premature opened/closed trades.

Chart 4: S&P 500 index - Standard Deviation.

S&P 500 index - Standard Deviation.

More Studies Coming

Stay with us - And always get the latest in technical market analysis!

 

Market Outlook

Market Stage
(4/1/2009)

On Tuesday we mentioned in our outlook that 'the new formation of bearish volume accumulation on this chart may push the indexes towards recent highs.' From an early deficit, the indexes moved higher and finished positively.

The view presented by our 60-day SBV(20 period) charts show a SBV advance. This is due to the strong single sided nature of today's trend higher. At the end of the session, the SBV values turned positive: plus 17% on the NASDAQ 100 and S&P 500 and plus 13% on DJI. One interpretation of the rising SBV on this chart is to suggest further advances.

However, the view of the lower term chart, the trend may still align with the longer term 1.5-year SBV(10 period) chart view. This shows declining SBVs on the S&P 500 and DJI, while the SBV is flat on the NASDAQ 100. As the longer term view governs the overall trend, the shorter term view can show an impending change in the trend. This longer term view shows declining SBV and is not a positive sign, however the absolute values of these SBVs are still at highly positive and because of that we may assume that despite the declining SBV this chart is still positive.


Market Status
(4/1/2009)

Market Performance:
 

Last Change Volume A/D Ratio
S&P 500 810.44
13.20 (1.66%)
5,015,949 3.85
NASDAQ 100 1,252.51
15.50 (1.25%)
988,557 3.30
DJI 7,758.02
156.83 (2.06%)
1,745,214 29.00

On the first day of the second quarter, the indexes advanced tentatively with some sectors more positive than others. Overall, the NASDAQ 100 was ahead by 1.25%, which pales in comparison to the S&P 500 which advanced 1.66% and the Dow which gained 2.06%. Cumulatively for the week, the NASDAQ was ahead by 0.08%, The S&P was negative by a slight 0.67% and the Dow was also negative although it was by a small 0.23%.
This session's volume numbers was not unusual, the S&P 500 attained a daily volume of 5,016 million shares. This is close to the average volume we saw on a daily basis during the past 3 months.

NASDAQ 100 - 4/1/2009. 1-day Intraday, Modulated Volume.

 

Volume Analysis:
9:30 - 12:00 From yesterday's close, the NASDAQ 100 opened with a strong gap down. Given the strong formation of Bearish volume at the end of yesterday's session, the decline was somewhat surprising. This volume should have supported the index and caused it to move somewhat higher or at the very least remain unchanged. As the trading progressed however, the move higher to close the gap continued to develop. The slope of the uptrend was very steep and we can see some moderate surges of Bullish volume develop over a broad area. At roughly 10:30 and then 11:30 we can see these surges of volume produced very clearly.

Within an hour of the open, the index closed the opening gap and it continued trending higher into the midday.

12:00 - 16:00 With two large and clearly intense surges of Bullish volume generated, the probability for a decline was strengthening. From 12:00 until 12:30 the NASDAQ 100 gave back some of its hard gained ground. At 12:30 we can see a clear up tick in Bullish volume. These surges quickly stopped any further declines and already strong, the trend higher continued.

Higher highs were to be the result in the afternoon. But despite trending higher over 3% intraday, any further advances could not be built upon and into the close, the index dropped strongly only to limp into the close with a slightly positive finish.



Short Term (lasts a few hours to a few days): Since March 23 (8 trading sessions) the index has basically trended within a small chop zone. And during time we have continued to write that 'conditions in the market remains mixed'. The mixed nature does have a bias and currently it is slightly down. In today's action however, a strong morning decline was followed by a strong intraday trend higher.

The volume generated in today's session was in form of Bearish volume during small declines in the afternoon. From a longer term view, there continues to be a slightly greater amount of Bullish volume produced which will still have the effect of causing the index to decline at some near term. Having said that, conditions remain mixed and therefore a neutral to slightly positive day would not be out of the question.


Analyst's Daily Tip:

Charts: Using different views and settings
To put the magnitude of a volume surge into perspective, it is essential to look at more than one chart and use multiple time frames. For instance, while a volume surge may look imposing and seem critical on 1-day or 5-day chart, that same surge may not loom as large on a 30-day chart, and it might even seem insignificant on a 60-day chart. Volume surges that are noteworthy on short-term charts must always be placed in the context of the higher time periods, so that misinterpretations of their potential impacts on mid- or long-term trends can be avoided. For instance, a prominent surge appearing on a 5-minute chart could well affect an index in the short term, but it may not necessarily have much of an impact on the prevailing mid-term or long-term trend.

Volume surges
Volume surges are evaluated according to their magnitude and duration. It is vital to appraise each particular volume surge before attempting to predict how it might impact future market direction. We categorize volume surges as short-, mid-, or long-term. We also classify intraday surges.

Short-Term Volume Surges: These are volume surges that potentially affect market trends over the short-term (i.e., anywhere from one to several days).
Mid-Term Volume Surges: These are volume surges that potentially affect the market over the mid-term (i.e., from several weeks to several months).
Long-Term Volume Surges: These are volume surges that have the potential to affect market direction over the long-term (i.e., for up to several years).


Financial Press Overview:
According to Autodata Inc. car companies sold 857,735 light vehicles last month. This equates to a 37 percent decline from a year earlier. The silver lining is the fact that the American companies along with Toyota were positive by double-digits over February's numbers (the lowest in 27 years). The average incentive on vehicles sold was $3,169 up 30 percent from a year earlier. The drive to offer more incentives has been pushed most readily by Hyundai and GM both of whom have offered more on incentives than ever before.

Much of the talk between economists is on the topic of how close the economy is to the bottom. The Commerce Department has reported Wednesday that construction spending dropped 0.9 percent in February. This marks the fifth straight monthly decline however it was less severe than the expected 1.5 percent decline. The slow down in the decline is also echoed by the Institute for Supply Management which reported manufacturing rose to 36.3 from 35.8 in February. The low number still implies that the manufacturing sector is shrinking although not at the torrent pace it once was.


Key economic data for the week starting Mar 30th, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.
Thursday:
08:30 Initial Claims 03/28 653K NA

10:00 Factory Orders Feb -0.3% -1.9%
Friday:
08:30 Average Workweek Mar 33.3 33.3

08:30 Hourly Earnings Mar 0.2% 0.2%

08:30 Nonfarm Payrolls Mar -656K -651K

08:30 Unemployment Rate Mar 8.5% 8.1%

10:00 ISM Services Mar 42.0 41.6


If you have any questions, please do not hesitate to send us an email. Our support team will work with you personally to provide you with quality service.

Sincerely,

www.marketvolume.com
Highlight Investments Group.

Disclaimer: You agree that you are solely responsible for any trading decision you make based on this information.  All content developed by Highlight Investments Group is regulated by our disclaimer and privacy policies.


You are receiving this email because you are a subscriber of MarketVolume®'s services. If you do not wish to receive emails from us, simply click on this link and your email will be deleted from our database.



No virus found in this incoming message.
Checked by AVG - www.avg.com
Version: 8.5.283 / Virus Database: 270.11.35/2034 - Release Date: 04/01/09 06:06:00


__._,_.___


Your email settings: Individual Email|Traditional
Change settings via the Web (Yahoo! ID required)
Change settings via email: Switch delivery to Daily Digest | Switch to Fully Featured
Visit Your Group | Yahoo! Groups Terms of Use | Unsubscribe

__,_._,___
No virus found in this outgoing message.
Checked by AVG - www.avg.com
Version: 8.5.283 / Virus Database: 270.11.35/2034 - Release Date: 04/01/09 06:06:00