Thursday, April 16, 2009

Stock Market Update - April 16, 2009

An interesting thing occurred today. The NASDAQ closed above its January 2009 high while its ETF counterpart QQQQ had a net outflow of $127 million. No other index related ETF had any net inflows or outflows to speak of (DIA & SPY).

The overall U.S. stock market had a net inflow of $1.8 billion today. All sectors had net inflows including the financials. Note the blue line with the price of the Dow ... it is the cash flow reading ... it looks to have made a low and is working its way back up. This market could continue to move up over the next few days before we have a near term top. Most all indicators point to overbought ... but again ... these indicators can remain overbought for a while. I would like to see a pull back before adding any money.

This chart was a positive sign today for the market. The transports made a new high in this latest move up. A few days ago the Dow made a new high and the transports did not confirm with a corresponding new high for this rally. This could be viewed as bullish for the market near term. Only time will tell.

I am ending with the NYSE percentage of stocks over their 200 moving average. I just wanted to point out this rally still may have a little ways to go. The index reads just over 22% today ... this is 22% of all NYSE stocks are above their own 200 moving average. The point is the percentage number was over 50% in May of 2008 and October 2007 before the market started to rollover to new lows. Just a word of caution to be on guard that we are seeing some indications of topping in the near term but still may have some more room to move up when reviewing this chart. Just be smart in using your stops to protect yourself.
Note: All cash inflows and outflows were obtained from The Wall Street Journal.

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