Stock Market Update - Weekend Part 1 April 24, 2009

This weekend there will be 2 Parts due to the capacity of the chart downloads with Google.

Part 1

The S&P 500 did not confirm a new high the past week from the prior week. We still have a divergence with the Tick data on the above chart. The money flow line (blue line with price) is pointed down. However, the volume data show some type of near term bottom has occurred ... note the blue down arrow on the second chart below the price. We will just have to wait and see what type of bottom it is.

This market just feels like it wants to continue its move up in price. This next week is important in terms of price movement, the news on the banking stress tests and stock market money flow.

On Friday, money flow for the DJ U.S. Total Stock Market was pretty good with $3.4 billion of inflows. The volume that was traded on the NYSE was up 74% of the time ... however ... we do seem some signs of money moving out. The ETF for the S&P 500 (SPY) had a net outflow of almost $172 million for the day and the ETF (double) inverse of the S&P 500 (SDS) actually had a net inflow of around $24 million. One has to think what is the big commercial money up to these days ... do they believe the rally is over ... we have now had over $500 million in the past week or two in money moving out of SPY and this was the first significant inflow of money into SDS with the latest rally. Are the commercial moving out of the ETF indexes and into individual stocks (look athe the total market inflow for Friday) or are they moving out of the market. This is something to consider for the near term. Note all cash flow and volume data was obtained from The Wall Street Journal.

This is a daily chart of the Dow. It shows that money flowing into the market at the moment. Look at the chart second from the bottom ... the black line represents the measurement of the cycle of underlying volume ... for the near term it is showing that volume has peaked or a bottom has been made (see earlier blog during the week for the full explanation if you missed it). However, the indicators on the top all show a topping action near term ... be warned these indicators can move down if the market remains in an extreme overbought condition for an extended period of time.

The last chart for the Part 1 update is the 60 minute chart for the S&P 500 index. I wanted to show that in the near term that the cash flow indicator with price (blue line at the top) has peaked. Also, the bottom two indicators show a near term topping as well ... remember that divergences can occur in these indicators and price can move up in the near term. Remember to use your stops.

READ PART 2 BELOW!!!