Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Sunday, October 14, 2012

Sentiment EMAs

Stock Market Technical Analysis Blog

Click on image to enlarge

 In this weekend's blog I will post some charts showing what is called the Sentiment EMAs.  These two exponential moving averages are widely used in the industry as turning points for when a stock is either sent to the doghouse or comes back into play.  When the smaller red EMA is above the larger green EMA, the stock or index is considered midterm bullish and when the the red is below the green it is considered midterm bearish.

Looking at the center row first, we see that the Nasdaq slipped below a couple of days ago and the QQQ slipped below at the beginning of the week as did AAPL.

Looking at the top row next, we see that the DOW is still topside but barely.  In the next chart the S&P has the two lines merging.  In the third chart, the SPY is in danger of down crossing at the open on Monday.  As is the IWM (Russell 2000) shown in the last chart.

The bottom row are four widely held symbols which all are still in bullish territory.

I red highlighted the borders of the SPY and VIX chart as they are the most crucial for Monday.  If Monday's market open is negative, the SPY could have its red line cross down below the green for the first time in four months and the VIX could have its red line cross above the its green, an event that triggers automated sell programs both with hedgefunds and institutions.  If Monday's open is up, the SPY and the VIX  may continue to hold merging to a point and require another day or two to determine direction.


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