The hourly chart for the Dow shows overbought levels on all indicators. That does not mean that price will move down from here on Monday ... we will have to wait and see. We still have the money flow on the daily chart that is still moving up ... but that could stop at anytime. Just be aware and use your stops accordingly to your risk appetite.
On Friday we did have a 93% volume up day for the NYSE on stronger volume than on average over the last few weeks. We did see some selling on strength related to SPY but I believe it is people and institutions selling it only to buy individual stocks instead. We "MAY" see a down day very soon because of the excess bullishness from Friday's action. We also had a massive amount of capital to flow into the broader market on Friday ... over $12 billion. I still think based on the money flow and the indicators that we have some more room to move up ... not to say we will have some setbacks. It may be possible that we will see a Dow 11,000 to 12,000. A few items that concern me that I will go over further below but one item that I wanted to bring to your attention was from
Chart of the Day and they illustrated the current S&P 500 PE ratio for the end of 2
nd quarter of 2009 was 129 ...
the highest ever on record. Historical average is around 15 to 17 over the last 80 years.
As long as the dollar continues down ... we will continue to see the equity and commodities markets hold or increase in value. If the dollar slips below 70 ... we are in trouble ... inflation is ahead and I don't think we are up for the cure.
I wanted to show you a moving average for volume (blue line) with the S&P 500 (black line). As price moves higher we are seeing lower volume traded. I would like to see much more participation from the institutional buyers ... this would really show a healthy rally. The chart below the main one is the actual volume for the NYSE.
The last item of interest is the Call/Put Ratio ... we have 2 year
record set on Friday. We had the lowest reading in the two years. The blue arrow to the bottom right of the chart (sideways pointed arrow) shows Friday's close of 0.39 ... each time we have extremes to the lower end it marked a top in intermediate prices ... I cannot say it will occur this time again ... but it is something you should keep in the back of your mind. The blue line is the S&P 500, the black line measures the tick data cycle and the green line measures the Call/Put Ratio cycle.
The hourly chart for the Dow shows overbought levels on all indicators. That does not mean that price will move down from here on Monday ... we will have to wait and see. We still have the money flow on the daily chart that is still moving up ... but that could stop at anytime. Just be aware and use your stops accordingly to your risk appetite.
On Friday we did have a 93% volume up day for the NYSE on stronger volume than on average over the last few weeks. We did see some selling on strength related to SPY but I believe it is people and institutions selling it only to buy individual stocks instead. We "MAY" see a down day very soon because of the excess bullishness from Friday's action. We also had a massive amount of capital to flow into the broader market on Friday ... over $12 billion. I still think based on the money flow and the indicators that we have some more room to move up ... not to say we will have some setbacks. It may be possible that we will see a Dow 11,000 to 12,000. A few items that concern me that I will go over further below but one item that I wanted to bring to your attention was from Chart of the Day and they illustrated the current S&P 500 PE ratio for the end of 2nd quarter of 2009 was 129 ... the highest ever on record. Historical average is around 15 to 17 over the last 80 years.
As long as the dollar continues down ... we will continue to see the equity and commodities markets hold or increase in value. If the dollar slips below 70 ... we are in trouble ... inflation is ahead and I don't think we are up for the cure.
I wanted to show you a moving average for volume (blue line) with the S&P 500 (black line). As price moves higher we are seeing lower volume traded. I would like to see much more participation from the institutional buyers ... this would really show a healthy rally. The chart below the main one is the actual volume for the NYSE.
The last item of interest is the Call/Put Ratio ... we have 2 year record set on Friday. We had the lowest reading in the two years. The blue arrow to the bottom right of the chart (sideways pointed arrow) shows Friday's close of 0.39 ... each time we have extremes to the lower end it marked a top in intermediate prices ... I cannot say it will occur this time again ... but it is something you should keep in the back of your mind. The blue line is the S&P 500, the black line measures the tick data cycle and the green line measures the Call/Put Ratio cycle.
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