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Intermediate Trend: Still Headed “South” April 17, 2014

Posted by Tom in Thoughts.
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First off I’d to wish (to those who celebrate it) Happy Easter and a belated Happy Passover.

What a (short) week !  Early on it looked like the market would continue where last week left off, going down.  But along came a support level on Wednesday right around 3990 plus some encouraging news, and the market rallied.  Now rarely does a turn happen that quickly, in a “V” shape, so we’ll see what happens.  Looking at the chart below we have NOT made a “higher high” swing, so we must conclude that the intermediate trend for now is still down.

NASDAQ

I’ve spotted in a reverse trend line set (green lines) which show a downward channel.  IF we get a close above that upper trend line I may start to get optimistic.  The international news continues hopeful but mixed from Ukraine.  We see that in the oil complex as that’s been one of the few bright spots lately for stocks.  I note the rather modest volume of the last two bars, low for a rally.  Perhaps it’s the holiday and a lack of traders, but seeing at least average volume on these up bars would have been more encouraging.  The “Money Flow” histogram (red) above the price chart echoes the tepid response to the last two days.

The pie chart below shows the number of stocks in the S&P 1500 index that are in intermediate term Accumulation or Distribution phases.  This chart does not “turn on a dime”, but it doesn’t show the investors are in a hurry to buy right now.  More Red than Green in there.

SP 1500 A-D

Since we’re in earnings season that will be a big factor on the general market over the next 2 weeks.  Apple and Facebook report next week, so that may be a market mover as well.  So far earnings results have been mixed.

Have a great weekend and keep an eye open next week for clues as to the strength of this reaction.   ………  Tom  ………

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