Piker Trader

Last week was a true victory for the bears the first since early February. The 1213 price level which was discussed on this site held as resistance.  But while price tells us one thing(price action will be disussed later on), there are other ways to understand the market. Breadth can tell a trader where the market is truly headed and if the price action is support by the internals.  Below are a few breadth indicators to watch.

Various indicators are on this chart, included are NYMO, Stocks in SPX above the their 50 day ema (SPXA50), and Stocks in SPX that are above their 200ma (SPXA200)

The first thing to notice is that the SPXA50 has been declining as the market trends higher and is making new highs.  This indicator shows that slowly stocks have been dropping below the 50 Day MA and 200 Day MA, which is not a bullish signal.   These indicators should have been either making new highs with the market or remaining at the extended levels they were at.  This failure shows weakness in the market as selling presure is pushing stock below key moving averages. NYMO has been an showing a bearish divergence sine late March a wedge has formed and a break could cluing us into where the market may go.

NYAD: This indicator has been accurate for the entire rally.  It has never corrected and flipped underneath it's moving averages as it did in 2007.  Each time it has made new highs the market has followed.  Currently it is sitting on its 8 Day ema for the 3rd time in the last week.  The pervious tops in the market have started with a pattern very similar to this.  Most of the tops have also started after NYAD touched the top of its BB.  If NYAD stays above its 8 Ema, it could be signalling another move up but negative price action could send NYAD towards it's 19 and 39 ema.  The tops have all marked a small correction as NYAD has never turned and trended down below its Moving averages.  Each time the 39 has provided a bouncing point.

TRIN: Not to much to report with TRIN it gave a Sell signal on April 23rd with the 21 crossing above the 55 Moving average

TICK: Tick has not been participating in this last rally.  Intra-day tick may be agreeing with the market but looking at TICK on a longer-term time frame it has failed to support the upside price action. It has failed to make new highs with the market.  Tick via it's moving averages is also trending down, and cautiously trending to dip below 100 and zero.  A dip below zero would signal some strong selling.  The blue lines on this chart are indications when TICK dipped below zero, and the pink are when it dipped above.

So to summarize the internals are showing some weakness, with many indicators pointing to bearish divergences and weakness in the breadth of the market.  What is ambiguous and is the million dollar question, is the market reloading or changing direction.  The next week or few days will show if the market is pausing to climb higher or there is a shift in the winds of the market.  A simple break of a key technical level could start some significant selling pushing all these indicators lower.  It is just to early to call right now. Price action has caused me to go slightly bearish, but if NYAD dips below its 8 day, and TICK dips further it could signal some selling pressure will be here and coming. So stay tuned and check out the post later on the price action!

NYSI and NYMO are two key oscillators in the market. Here are charts of NYMO and NYSI

NYSI is nearing support levels watch for a bounce in NYSI or a break.  If the market cannot move up with strong advancers NYSI should be down.  Also NYSI is only 300 points away from breaking zero which is seen as long term bearish. Also on this chart look at NYAD and SPX, NYAD has held support at 200k

NYMO

One thing to notice about NYMO is the bullish divergence.  The divergence has occurred a few times since Feb.  Although the current divergence is not as strong as it was the pervious times.