Tuesday, April 13, 2010

Midday Briefing for April 13th: More Range Trade

We're seeing another one of those range days, in which price oscillates around a relatively flat volume-weighted average price (VWAP; red line). We rejected lows on the move below the overnight range and, at present, are consolidating near the range highs. We have near-term resistance from yesterday in the 1195 area; the NQ futures and Russell 2000 Index are at a resistance area corresponding to yesterday's highs.


trader said...

Dr. Brett,

What do you make of the market price action vis-a-vis the persistently negative TICK?


Ebisu said...

The TRIN indicator went quite bearish into the close; and check out the McClellan Oscillator - it is showing quite a bearish divergence - indices continue upward but the oscillator is running downward.

But NYSE New-High/New-Low is still strong, so a correction would be to mitigate the overbought condition we are still in. Since February 10, the S&P 500 has closed below the 10-day EMA only twice.

Ebisu said...

As of 3 pm ET,April 14, CBOE total put-call ratio at 0.56; 10-day EMA is at 0.73, around the same level as in early January.

Very bullish reading = very bearish trade setup; however, momentum on weekly chart of the S&P 500 is showing increasing strength.