This is a daily chart of the S&P 500 Index. Prices are testing the 1077.35 level, and a break of this area will lead prices to test the 1032.85 mark. The lower section of this chart shows OBV- On Balance Volume. In June and July of 2009 we had positive divergence as the the new low in prices was not confirmed by the volume. Now we have the opposite scenario. Prices have made a new High, but volume has lagged compared to the high made in September. Unless there is a volume surge with new higher prices, look to test lower levels of the opening ranges, 1032.85 is first up.
NDX Nasdaq 100 Index (click to enlarge)
Technology stocks of the Nasdaq have been stronger overall. Earnings by Apple Computer and Amazon have helped keep the index near its yearly high. Lately volume has been great on down days compared to up days, confirming the lack of a new high in On-Balance-Volume shown in the lower section of the chart. A break of 1749.10 could lead to a test of the 1671.93 level.
NYSE Composite Index (click to enlarge)
This chart compares the prices in the NYSE Composite Index to the percentage of stocks trading above their respective 40Day Moving Averages. It is clear that the new highs lately are being attained buy fewer and fewer stocks carrying the index, less stocks are staying above their 40day as the index makes new highs for the year.
The opposite of this happened in March of 2009. Prices made a new low compared to November of 2008. This new low was not confirmed by a new low in the percentage of stocks trading above their 40 day moving average. This isn't a perfect indicator, as all stocks can trade above or below their moving averages, but it can show weakness and lack of over all momentum.
NYSE Composite Index Weekly (click to enlarge)
This is a weekly chart of the NYSE Composite Index showing both the percentage of stocks trading above their 200 and 40 day moving averages. It also includes re-tracement levels from the high 2007. We are approaching the 50% level. A year end move is still possible to try for the 61.8% level, but there should be consolidation first. The strength of this consolidation will determine if we try for a new high or retest lower levels.
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