Monday, January 04, 2010

Tracking Market Themes in Real Time

One key trading strength that I'll be discussing in upcoming posts is the ability to think in themes. Indeed, market and intermarket themes form a large part of the context that helps active traders frame their ideas. Note some of the themes from today's market:

1) Price strength across the broad market, with advancing stocks outnumbering decliners by about 1800 issues as I write;

2) Lack of intraday selling sentiment, with no NYSE TICK values below -800 as I write;

3) Strong commodities and weak U.S. dollar, in the wake of positive economic news out of China.

The theme of economic strength--in the U.S. as well as emerging markets-- is going to be one worth watching early in 2010.

Meanwhile, as I'm watching the market since posting the chart above, I'm also noticing a new daily low in TICK. The NQ futures are barely positive on the day, and we're seeing notable relative weakness among Consumer Discretionary shares. It's the real time updating of market data that tells us when themes are continuing to hold sway, and when they're losing traction.