Self Directed Investor Inc
SDI: "Empowering investors with ideas and education"
Symbol Lookup »  
Topics:ChinaETFsEarningsEconomyEnergyForexGoldIncomeLessonsIdeasTrading

  • Other news: News from PR Newswire
| More

Quick Checking SP500 Market Internals to Start Thanksgiving Week

Mon, Nov 19, 9:12 PM ET, by Corey Rosenbloom

As you’re probably aware, the Thanksgiving holiday week tends to be a bullish week and Monday’s price action may be setting the stage for continued bullishness.

Let’s take a quick look at the S&P 500 “Big Three” Market Internals and note the recent powerful divergence that set the stage for Monday’s big rally.

Here’s the 30-min bigger picture of the S&P 500 and key Market Internals:

For market internals, we use Breadth ($ADD), NYSE TICK ($TICK), and Volume Difference of Breadth ($VOLD).

While Breadth and VOLD reveal wider participation (measuring issues up/positive on the session vs issues down/negative on the session), TICK is a more immediate measure of buying or selling strength/pressure.

We use divergences in conjunction with price to provide clues as to prevailing trend continuity or future trend reversal.

For example:

Price falling to new lows as internals also fall to new lows – this serves as a confirmation and suggests new lows are yet to come (trend continuity).

Price falling to new lows as internals make a series of higher lows – this divergence serves as a non-confirmation and suggests a future reversal may be around the corner.

You can see both of these principles playing out with the new price and internal lows developing on November 7th which suggested further price weakness (new lows) yet to come – and they did.

A similar “new price low and new internal low” situation occurred on November 14th with the final low (so far) occurring on November 16th.

There are two sets of positive divergences on the chart, the first of which stretches from November 8th and 9th which gave rise to a failed reversal and led to a small retracement up only – no reversal.

The most recent set of positive divergences on November 15th and 16th set the stage for Friday’s powerful intraday reversal and the subsequent follow-through in today’s (Monday’s) session.

I like to visualize these concepts on the chart as bullish, bearish, or neutral biases as such:

Bearish zones (or biases) occur when price and internals confirm with new lows appearing in both.

Bullish zones (biases) similarly occur when price and internals both reveal new swing highs together.

Neutral or “potential reversal” zones develop when we see non-confirmations or visual divergences between price and respective internals (or volume or momentum).

I highlighted these on the clearer 15-min chart as red, green, and yellow conceptual zones.

The final chart reveals an even clearer perspective as we step into the 5-min intraday chart:

Pay close attention to the final swing low on Friday, November 16th in terms of the persistently positive divergences in all three Market Internals.

Specifically, if we look at Breadth ($ADD) on November 16th, we see the morning Breadth low was -681 at 9:10am CST when price traded to a new low of 1,345; one hour later at 10:30am CST, Breadth ‘improved’ to -482 as the S&P 500 registered a new session low of 1,343.50.

This is valuable information for intraday and even swing traders to recognize in real-time and examples like these help clarify the concepts when a similar situation will occur.

Ultimately, price did reverse and buyers helped push the market to the present breakthrough and short-term swing reversal.

Which brings us to where we are currently….

While Breadth and VOLD clearly pushed to new recent indicator highs, TICK did not. Neither did volume which was relatively low for today’s session, especially when considering the 27 point SP500 rally.

Yes, odds do seem to favor additional follow-through to the upside especially if price can break above the horizontal resistance into 1,390, but if we do see continued upside action this week, pay very close attention to these key market internals and volume as well for additional signs of possible confirmation.

If we continue to see higher prices on lower internals and market internals as may be the case, then structure will shift back to the “neutral” then likely bearish case.

If so, then the non-confirmation would label this up-move as nothing more than an upward retracement against a prevailing daily chart short-term downtrend and not the start of a bullish trend reversal in motion.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey's new book The Complete Trading Course (Wiley Finance) is now available!

blog.afraidtotrade.com


SDI Glossary: "Bearish" Definition
SDI Glossary: "Bullish" Definition
SDI Glossary: "price" Definition
SDI Glossary: "Finance" Definition
SDI Glossary: "NYSE" Definition
SDI Glossary: "TICK" Definition
SDI Glossary: "Volume" Definition
This Article's Word Cloud:   Breadth   Corey   Friday   Internals   Market   Monday   November   Price   TICK   VOLD   afraidtotrade   attention   biases   both   bullish   chart   come   concepts   confirmation   continued   divergences   final   follow   internals   intraday   lows   market   neutral   occur   positive   powerful   price   rally   recent   reversal   session   stage   swing   then   these   this   today   trend   volume   week   when   which   will   with   zones

| More

GMCR Reveals a Prelude to a Pullback Lesson
Wed, Nov 26, 3:51 PM ET, by Corey Rosenbloom

We can learn valuable lessons by studying classic examples of price action – in this ...

Join a Free Options on ETFs Training Webinar Tonight!
Tue, Nov 25, 4:11 PM ET, by Corey Rosenbloom

If you’re looking to diversify your trading strategies, learn a new technique, or just are ...

Updating Key Levels and Opportunities in Natural Gas UNG
Tue, Nov 25, 3:51 PM ET, by Corey Rosenbloom

I had a question about Natural Gas this morning and found something interesting on the ...

Nov 24 Midday Update and Trending Stock Scan
Mon, Nov 24, 2:11 PM ET, by Corey Rosenbloom

We continue to see “more of the same” action and the simplest play is to ...

Open Air Pullback Planning for Best Buy BBY Breakout
Fri, Nov 21, 3:11 PM ET, by Corey Rosenbloom

Best Buy (BBY) shares continued their uptrend with a breakout gap into “Open Air.” Let’s ...

Scanning for November Stocks Most Extended from 200 SMA
Fri, Nov 21, 2:31 PM ET, by Corey Rosenbloom

Which top trending stocks – both bullish and bearish – are most extended from their ...

Russell 2000 Showing Relative Weakness at the New Highs
Thu, Nov 20, 11:31 AM ET, by Corey Rosenbloom

A quick “Quad Index” Grid shows us that the small-cap Russell 2000 is showing relative ...

Nov 19 Midday Market Update and Stock Scan List
Wed, Nov 19, 3:06 PM ET, by Corey Rosenbloom

Price action continued its bullish activity despite a morning retracement against the broader trend. Note ...

Trading the Extended Intraday Run
Tue, Nov 18, 4:11 PM ET, by Corey Rosenbloom

How do you trade run-away markets? Very carefully! Let’s chart the intraday stock market action ...

Quick Country ETF Comparison Reveals the US as the Best in a Bad Bunch
Tue, Nov 18, 11:21 AM ET, by Corey Rosenbloom

Let’s take a quick fly-by overview of the international ETF landscape to reveal an interesting ...

SP500 In the Sky with Diamonds
Tue, Nov 18, 8:11 AM ET, by Corey Rosenbloom

I couldn’t resist the catchy headline to demonstrate the mini-Diamond Pattern forming in the S&P ...

A Broader Triple Timeframe Glance at Apple AAPL to Plan
Mon, Nov 17, 11:31 AM ET, by Corey Rosenbloom

Apple (AAPL) shares continue to enjoy their bull-run and new all-time highs, but what does ...

Rest Easy with this Options on ETFs Trading Strategy from John Carter
Sun, Nov 16, 1:11 PM ET, by Corey Rosenbloom

Have you ever wanted to reduce stress with your trades? Of course, we all do. ...

Does a Lower Priced Trading Computer Mean You are Sacrificing Speed or Performance?
Fri, Nov 14, 8:11 AM ET, by Corey Rosenbloom

Does a low price trading computer mean you're sacrificing speed or performance? We have a ...

Bull Trap Intraday Reversal Market Update and Power Trending Stock Scan Nov 13
Thu, Nov 13, 2:53 PM ET, by Corey Rosenbloom

Wow – well that was certainly interesting. Stocks continued their short-squeezed march higher but stumbled ...

About those Support Levels in Crude Oil…
Thu, Nov 13, 2:21 PM ET, by Corey Rosenbloom

Crude Oil traders have found it impossible to call a bottom (reversal) in the sharp ...

Nov 12 Update and Stock Scan Down from the Highs
Wed, Nov 12, 1:41 PM ET, by Corey Rosenbloom

“And now, for something a little different.” Stocks have traded sideways into the 2,040 S&P ...

Planning the SP500 into the New 2040 Level
Wed, Nov 12, 12:31 PM ET, by Corey Rosenbloom

Market Internals and a Critical Trendline give us clues about how to position into the ...

Nov 10 More Bullishness Market Update and Stock Scan for the Day
Mon, Nov 10, 2:41 PM ET, by Corey Rosenbloom

We have “more of the same” upside action in the stock market, defying bears all ...

4 Traders Discuss the Upcoming Market Move - Join Me Monday 1pm EST
Sat, Nov 8, 8:11 AM ET, by Corey Rosenbloom

Start next week with a live market panel discussion about the week ahead! Join me ...

Nov 7 More Upside Action Market Update and Stock Scan
Fri, Nov 7, 2:21 PM ET, by Corey Rosenbloom

We have “more of the same” upside action in the stock market, defying bears all ...

Retracement Candidates from 12 Stocks Extended 10 Days Straight Up
Thu, Nov 6, 1:51 PM ET, by Corey Rosenbloom

An amazing 12 stocks in the S&P 500 have traded ten days straight up – ...

Apple AAPL Overextended into 110 - Planning the Next Swing
Wed, Nov 5, 11:41 AM ET, by Corey Rosenbloom

Apple (AAPL) shares achieved their $110 upside target on an overextended price swing. Let’s update ...

Nov 4 Retracement Market Update and Trending Stock Scan
Tue, Nov 4, 1:51 PM ET, by Corey Rosenbloom

Unlike yesterday, stocks took a pause and retraced lower during today’s session. Note the earlier ...

A Message from Market Internals at the Nov 3 High
Tue, Nov 4, 11:31 AM ET, by Corey Rosenbloom

While price screams “higher, higher!” Market Internals yell “Caution! Look out below!” Let’s see who’s ...

November 3 Breakout Market Update and Stock Scan
Mon, Nov 3, 2:41 PM ET, by Corey Rosenbloom

Stock prices continued to creep higher after breaking above the 2,000 level in the S&P ...

Fed Aftermath Market Update and Stock Scan for October 30
Thu, Oct 30, 3:41 PM ET, by Corey Rosenbloom

At the end of QE3, stocks continued higher on the reported GDP growth and the ...

Three Knee-Jerk Reactions to the Federal Reserve End of QE Announcement
Wed, Oct 29, 3:41 PM ET, by Corey Rosenbloom

The cross-market landscape reacted predictably to the end of the QE3 policy experiment and we’re ...

Fed Day End of QE3 Market Update and Stock Scan Oct 29
Wed, Oct 29, 2:41 PM ET, by Corey Rosenbloom

As expected, the Federal Reserve announced an end to its QE3 stimulus program and stocks ...

Quick Color Structure V-Spike Update Oct 28
Tue, Oct 28, 1:31 PM ET, by Corey Rosenbloom

Let’s take a quick glance at the “Color Structure” of the S&P 500 on the ...

The Make or Break Trading Level for Caterpillar CAT
Mon, Oct 27, 1:11 PM ET, by Corey Rosenbloom

Caterpillar shares (CAT) face a critical “Make or Break” Resistance test near the $100 per ...

Fun Facts from 2014 About Up and Down Days in the Market
Thu, Oct 23, 4:11 PM ET, by Corey Rosenbloom

Like any year, 2014 has seen its share of ups and downs in the market ...

Stepping Inside Sector Strength During the October Rally
Thu, Oct 23, 1:41 PM ET, by Corey Rosenbloom

When we see large price movements in the market – like our recent strong rally ...

Join John Person's Trader Tools that are Working Right Now Webinar Thursday
Wed, Oct 22, 5:41 PM ET, by Corey Rosenbloom

I wanted to call your attention to a special live educational webinar taking place Thursday, ...

The Rectangle Range Continues for Apple AAPL Trade Planning
Wed, Oct 22, 11:21 AM ET, by Corey Rosenbloom

After a mini-bear trap, Apple (AAPL) shares continued trading within a well-defined Rectangle Range Pattern. ...

Updating the Best and Worst Days of 2014 for the SP500
Tue, Oct 21, 6:21 PM ET, by Corey Rosenbloom

Pop Quiz: Without peeking, can you identify which month had the best day for the ...

Up Up and Away Market Update and Stock Scan for Oct 21
Tue, Oct 21, 2:31 PM ET, by Corey Rosenbloom

Just like the prior times when buyers intervened to force a short-squeeze, we’re seeing the ...

Bouncing Range Market Update and Scan for Oct 20
Mon, Oct 20, 2:11 PM ET, by Corey Rosenbloom

With a narrow bounce continuing to drive the market into a known resistance cluster, let’s ...

Netflix NFLX Pushing into Gap after Big Drop
Mon, Oct 20, 12:31 PM ET, by Corey Rosenbloom

Netflix shares (NFLX) suffered a large news-based drop last week that took price all the ...

Join Me and 50 Other Speakers Live at the Las Vegas Traders Expo
Mon, Oct 20, 11:41 AM ET, by Corey Rosenbloom

Be our guest live at the rapidly approaching Las Vegas Traders Expo! The special event ...

Rally Report and Market Update for October 17
Fri, Oct 17, 2:21 PM ET, by Corey Rosenbloom

Price today continued its recovery rally into resistance (see this morning’s update for targets) and ...

Surging Toward the 200 day SMA Target
Fri, Oct 17, 12:31 PM ET, by Corey Rosenbloom

As was generally expected, the market retraced higher after several down-days in a row took ...

Join Me Saturday for a Day of Trader Education
Thu, Oct 16, 5:31 PM ET, by Corey Rosenbloom

Join us live for a day of trading education from Fibonacci to Price Patterns, Trend ...

Stabilizing Market Update and Stock Scan October 16
Thu, Oct 16, 2:41 PM ET, by Corey Rosenbloom

We’re putting the pieces back together from a broken market yesterday! An afternoon violent “V-Spike” ...

Stabalizing Market Update and Stock Scan October 16
Thu, Oct 16, 2:21 PM ET, by Corey Rosenbloom

We’re putting the pieces back together from a broken market yesterday! An afternoon violent “V-Spike” ...

Fear Poll: Fed/QE, Ebola and Technicals Top Worry List
Thu, Oct 16, 11:51 AM ET, by Bill Luby

Stocks may be in the process of putting in a bottom, but with the VIX ...

Comparing and Charting SP500 Volatility since Bear Market Bottom
Wed, Oct 15, 3:41 PM ET, by Corey Rosenbloom

How does current market volatility – which is surging – compare to the two prior ...

VIX and More Fear Poll
Wed, Oct 15, 2:41 PM ET, by Bill Luby

Which of the following makes you most fearful, anxious or uncertain about the stock market?. ...

Market Crashing Intraday Update for October 15
Wed, Oct 15, 1:51 PM ET, by Corey Rosenbloom

“This time, it’s different” and it is very different. When price failed to hold a ...

Support Bounce Market Update and Stock Scan for Oct 14
Tue, Oct 14, 2:21 PM ET, by Corey Rosenbloom

The question today remains “Will we see an actual bounce or will we see yet ...

  More articles:  1 2 3 4 5 6 7 next »

ABOUT US »   ADVERTISE »   CONTACT US »   TERMS OF USE & PRIVACY POLICY »

Quick Checking SP500 Market Internals to Start Thanksgiving Week | Self Directed Investor | Copyright © 2008 - 2014, All Rights Reserved

Any ideas and opinions presented in Self Directed Investor content are for informational and educational purposes only, and do not reflect the opinions of BNK Invest, Inc. or any of its affiliates, subsidiaries or partners. In no way should any content contained herein be interpreted to represent trading or investment advice. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All site visitors agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. Read Full Disclaimer.

SDI is associated with: ValueForum.com -- a subscription-based online social networking forum of over 1000 individual investors. | MarketNewsVideo.com -- videos appearing on SDI are produced by Market News Video. | TickerTech.com -- stock quote content appearing on SDI is at least 20 minutes delayed and is powered by Ticker Technologies. | GoldStockStrategist.com -- Edited by Scott V. Nystrom, PhD, Gold Stock Strategist provides analysis on gold mining companies.