Stock Market Update - Weekend Part 2 April 24, 2009

This weekends update is going to be in two parts due to the limitations of the chart upload capacity with Google.

Part 2

The S&P 5 minute chart did not make a new intra-day high ... note the blue circle and the blue pointer ... however if we see strong volume and higher prices than the intra-day prices in the blue circle ... I will be leaning to higher prices in the near term. Use your stops wisely if you execute a long position. It just doesn't "FEEL" like this market wants to move down in price ... take a look at the Transports below.

This is a 5 minute chart of the Transportation index. It did make a new intra-day high this past week. Will the S&P 500 confirm?

This is a chart of the NYSE McClellan Oscillator ... I know its confusing but follow me for a moment. The Oscillator is the red and black line (red for down days and black for up days). The blue line is the S&P 500 index price and the green line ... you guessed it ... its the Frye Indicator. What I wanted to point out with this chart that the Oscillator and the Frye Indicator tends to move down in value before the S&P 500 index tops or rolls over ... look at the performance over the past 18 months that I have pointed out with the blue circles. This has been an early indicator in terms of possible price movement in the past.

The next indicator is the NYSE Summation index. This tends to be a lagging indicator in underlying price movement compared to the NYSE McClellan Oscillator. Note the Frye Indicator in green has topped and the actual index is still moving up ... its current value is about 790 ... it could move easily to 1000 ... I just wanted to point out the market still may have some room to move up in this current leg.

This is a chart of the volatility index (red and black line). I wanted to point out with the blue circles the sideways and downward movement of the index in the past and that the S&P 500 price (blue line) has moved up in value. I know that the Frye indicator (green line) is showing a possible bottoming action ... but just a word of caution this index could move sideways and the market can still sustain a move up in price. If the Volatility index is going to move back to its old lows then this market still has plenty of room to go higher over the next few weeks.

What I wanted to demonstrate is that the market is at a very big crossroads in terms of price, money flow, volume and the indicators. If the signs do not point to a specific setup that we feel comfortable with ... then sit back, relax and wait until we see a high probability trade to form and then we can execute. Remember use your stops wisely.