Monday, May 25, 2009

Stock Market Update - May 22, 2009

I am posting the intra-day 60 minute chart for the Dow. Basically it shows that we may have some more weakness Monday or very near term. Look at the red line with the price data above plus the bottom two indicators show topping action as well. Remember this is a short term indicator ... these things only stay overbought or oversold for a few hours at a time for only a few days not like the daily charts that can stay oversold for weeks on end.
The Dow was down by the end of the day on Friday. Again in my opinion not a good sign for a sell off so late in the day. Volume was low most likely due to the holiday weekend. The stats for the NYSE volume that traded 59% of the time was down. The DJ US Total Market had an outflow of money for the day with $276 million and the Financial sector lead the way with $176 million outflow. Something interesting did occur on Friday. The ETF for the S&P 500 (SPY) had an inflow of $288 million and the ETF for the NASDAQ (QQQQ) had an inflow of $42 million. I've read that this money represents commercials placing bets in the near term where the market is heading. We may very well get a bounce up from here for a few days ... but if it is done on small daily overall market volume ... watch out. The money flow ... the blue line with price on the above chart has bottomed once more ... this usually represents a near term support for price (it is an early indicator ... see March 9th lows with the blue money flow indicator). I still believe we are in for a correction ... the only question remains is how low will it go?

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