Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Monday, March 2, 2015

New S&P and Nasdaq Channels Come Into Play

In the market today, the S&P and Nasdaq bounced quickly from the open partly from a Nasdaq sixty-minute On Balance Volume divergence and partly from the new channels that have developed recently and have taken these two indices out of their four-week up channels.  These new channels are shown with green lines in the charts below.

Looking at these new green channels closely, we can see that the two indices started today at the lower line and finished the day at the upper green line.  The Nasdaq was watched closely today as it had room in its green channel to close above the 5000 mark and did.  The S&P will be watched most closely tomorrow as it closed right up under the upper line of its blue channel and up against the lower line of its February red line channel.  

It will be interesting to see if they can work the market higher to stop the heavy selling that was present in the market all through last week as is shown in the Trin chart below.

In the Trin Index chart, anytime its numerical value is above 1.00 there is light to modest selling pressure in the market.  When the red and green moving averages are also above 1.00 it indicates strong selling pressure.  When the red line is above the green line and above 1.00 it indicates there is very heavy selling taking place.  As can be seen above, there was heavy selling all through last week as the S&P maxed out at its upper blue long term channel line.  However, if you look closely in the final hour today the red EMA line did down cross through the green EMA line, a positive development but we will have to see if they can keep the momentum going tomorrow as the Nasdaq's sixty-minute On Balance Volume divergence has been resolved.

Trade well my friends