Stock Market Update - May 1, 2009

Today I will start off with the NYSE Percentage Bullish chart. This shows the extremes that we have faced in the market over the last two years. The current reading is at its highest since the summer of 2007 just before the market made its all time highs on the Dow. We could go higher without a doubt. The blue line is the S&P 500 price while the other line is the actual index.

This chart shows the percentage of stocks on the NYSE that are above their respective 150 moving average. This chart hasn't seen this level since the summer of 2007. This average can move much higher from the mid-60's that its at today. In 2003 and 2004, the percentage of around 90% of all NYSE stocks that were above its 150 moving price average. This is to simply show that "yes" the market looks overbought and it has cycled back down in price when its seen these types of numbers have been seen on the above two charts over the past few months ... but in 2003 and 2004 these statistics moved much higher and even cycled down themselves while the market continued to move much, much higher. Just another note that the percentage of stocks above their 50 moving price average is now 90.03% ... a number not seen since early 2003. Note the blue line in the chart above is the S&P 500 and the other line is the index itself.

Now for the price charts. This is a 60 minute chart of the Dow. Look at the higher highs and higher lows. Based on the Tick data and cycle indicators above we could see some strength in price on Monday.

This chart is of the daily price for the Dow. It shows that the blue line with the price is moving back up again after making a cycle low ... this blue line is money flow. Generally when money flow makes a cycle low and starts to move back up the market will generally show strength in underlying price. Note I said generally. Look at the green Frye indicator above it has topped.

Friday's action showed a quick move up to close positive for the day in the last 30 minutes of trading. The ETF for the NASDAQ (QQQQ) had a net outflow of cash for the day of just under $16 million. The DJ Total US Market had a net inflow of around $670 million on Friday and the NYSE volume that traded was up 57% of the time. The Financial sector as a whole a the largest net outflow of cash on the day and the groups with the largest percentage gains in price were Coal and Marine Transportation. Note the preceding data was obtained from The Wall Street Journal.

This is a weekly chart of the Dow. Basically, everything shows overbought on all the indicators ... everything. Price, money flow, volume, tick data ... everything. The one area that I can point out on this chart is if you look at summer/fall 2006 you will see the indicators pointed to oversold and the market continued its march forward ... climbing that "Wall of Worry" until its correction in the winter 2007. Just a word of caution that you always must look at the data including price to make your own assumptions on the direction of the market.