Stock Market Update - May 19, 2009

I think this chart says it all today. If volume and price does not pick up very soon ... this portion of the rally is going to be over. The question remains how much of a correction will be undergo? The volume for both the Dow and S&P 500 was lower today than yesterday ... and yesterday was lower than the day before. The only volume increase occurred with the NASDAQ index. Don't even get me started on what the Transportation index chart looked like today ... its even worse than the Dow and S&P. I could be wrong ... very wrong ... but I am convinced we are in for some type of correction here based on the technical data, volume data and price setup. Also, we are looking at a money flow divergence since the last big money flow high in mid March and again until May. Look at the volume chart ... the indicator is making a low ... this is consistent with the market making some type of top. Again, I believe if the dollar moves up ... then we will see weakness in the equities market.

This evening I circled the price data for May 2009 and May 2008 in the above chart ... does the May 2009 price data look like a similar setup that occurred in May of 2008 ... to the day!!! Is it possible that history is going to repeat itself. The next few days will tell the tale.

Market information for the up volume on the NYSE was just over 50%. The money flow was pretty much even and the largest sector with money outflow was ... you guessed it ... Financials. Remember ... protect yourself with stops if you have a fulltime day job like myself. Until next time take care.