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September 11, 2008

Cubano Charts

Maybe I shouldn't have tossed back that cubano at 10:30. With sleep eluding my best efforts this evening, I decided the charts could use a little more attention, and the result is this 2:00a post. I was basically hunting for reasons why my assessment for immediate bearish action in equities may be incorrect. Didn't find much, but let's have a look:

index chart

Daily volume has spiked to levels only seen at turning points. However, this volume was instigated by the GSE bailouts, and the corresponding rally has already failed. Therefore, the volume could be a warning of nastier action to come rather than of a near-term bottom.

index chart

Also note that volume on the NDX did not post extreme levels like the SPX. This difference is further indication that the volume spike on the SPX was GSE-induced rather than panic selling.

index chart

index chart

indicator chart

Despite the heavy selling seen this week in the broad market, NYSE advance-decline volume is no where near an extreme.

indicator chart

The same measurement for the Nasdaq is closer to an extreme, but not quite at the point where recent declines have been halted.

There are some readings to keep an eye one, but there are no blaring red flags to chase me out of my shorts. Therefore, I think I'll just let protective stops do their work and wait for new information. Good night (I hope).

 

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