Tuesday, April 21, 2009

Stock Market Update - April 21, 2009

Today the percentage of traded volume up or unchanged on the NYSE was 87% ... a pretty good day. Total inflow for the U.S. market was $728 billion with Oil and Gas sector pulling in the largest amount of funds and troubles continue for the finance sector ... it was the only sector with a negative outflow of money on the day. Nothing moved in or out in terms of money flow for QQQQ, DIA or SPY. These usually point to large commercial money moving in the market. One stock JP Morgan did have a large outflow of funds for the day. I guess everyone is headed for the door to take profits and forgo an all out Federal Government takeover of one of the best run banks on Wall Street (don't know if this would happen but I don't put anything past the Feds at this point). Note: All money flow was obtained from The Wall Street Journal.

I wanted to show this chart to identify the market lows in association with an indicator I am working on based on volume. This shows price lows pointed out with the blue pointer and the bottom chart shows an indicator based on volume and how the indicator peaks based once price has bottomed. It has worked within a few days of one another to a T over the last year. What I wanted to point out that this chart also is peaking today ... could this be all the market is going to give up in this correction?

The last chart for the day is the Percentage of stocks over their 50 moving average. It basically shows back in 2003 how much the market can move up and this indicator can work its way back down. What I wanted to demonstrate is if we are truly in a new bull market I don't know how much we can rely on this based on how this behaved in the new bull of 2003. However, if we look over the past 4 years this has been very reliable in calling near term tops and bottoms in the market. This index closed above 85% today with a close on Friday close to 90%. Use your stops wisely.


  1. Blue Horseshoe does like that the mkt did come back some after Monday's drop. The effect the financials may have on the mkt concern me since it looks like Obama and the Gang want to try and keep its hooks in the banks by setting it up so the banks cant pay the TARP $ back.

  2. Blue Horseshoe,

    Just now what is coming to light is how the banks have earned their money in Q1 of this year. Most of the earnings by the big guys was related to accounting gimics (legal) but no real tangible cash flow. I agree there is a major push for this administration to keep their hooks in the banks for control purposes. I believe they really want these banks to fail so they can nationalize them.

  3. I agree about them wanting to nationalize the banks. i havent studied how the Q1 bank profits were derived but i am sure you are correct about the cash flow. if the banks stranglehold by nationalization then that is going to have ramifications for the whole mkt. they have basically nationalized part of the auto sector and wouldnt be surprised if they found a way to do it for energy too (at least the "green" energy stuff).

  4. Interesting point I have not thought of on energy.