Tuesday, July 21, 2009

Stock Market Update - July 21, 2009

On the Daily Chart some of the overbought conditions have burned off. However, the main indicator (Green Line) with price remains really overbought. After today's selling on strength of SPY (over a half billion $) and QQQQ ETF's ... if you are long ... then you should really setup your stops here very tight to protect profits. I would not take any new long positions here. I would wait for a pull back then take a long. I would even look at buying TZA here around 19.75 to 20.00 a share to take advantage of a pull back ... be it very short. I would only look for a few points potentially.
On the daily chart of the Dow money flow has almost cycled its way back up to the top. I would look for some price weakness ... maybe. If it were me I would wait to go long after the money cycle indicator (blue line) has cycled back down close to the bottom and look to see if the price indicator (green line) is still moving back up. All the short term indicators are overbought ... by a lot. This does not mean that price cannot or will not move higher ... this is just what the indicators are pointing out for us. Today, believe it or not, we had a very bearish indication for the market ... while the market was up ... the NYSE volume had percentage down day of %57. We did have a modest inflow of cash today. With the index ETF's being sold on strength and the NYSE volume indicator ... I would be careful over the next few days.

One BIG item that still has me concerned ... volume ... it has not been very heavy in the latest rally. I would like to see some institutional support if this rally is to continue into the fall.

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