it is a big beast – there are big big players with billions of dollars trading the market every day
For Jan 30, 2019
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Now for small time folk like me, the deluge of money and trading will overwhelm me. that is why i will not day trade. 2.5 billion shares are traded and i am not capable of knowing what is going to happen because my position can be wiped out in a min.
also total dollar volume is 129 billion
that is why end of the day price is so very important . why ? Because after all the fighting and back and forth snd trying to decide on the tug of war and over and over again money and stocks trading hands. at last they come to a market agreed price.
this is the price market has agreed, P/E ratios or sales figures or Forward looking EPS etc all the knowledge is finally found in that price. All the billions of dollars of super computers and auto trading and algorithms and quants have come up with this price.
and i should respect it.
2700 was a strong century figure resistance for S&P 500 and then for NASDAQ it is 7000-7200.
On higher volume both crossed that number yesterday at the end of the month
i am long on QLD and AMZN call.
In the mind, as in life, it is always 20-20 looking back (hindsight is always clearer). In Trading the philosophy of this blog is always 20-20.
the closing price itself is the most significant. Why? yesterday (again 20-20) is a prime example. NASDAQ opened 106 points down – around 1.4 %. went down 124 points compared to the previous day’s close (1.73%) but then closed at 7085 about 12 points higher than it opened. Look at the following 5 min chart. It is range bound and closed at upper part of the range.
Now look at the chart below. It is S&P 500 Stocks Above 50-Day Average ($S5FI)
on 1/22/2018 this very reliable portent dropped by more than 11%. that was a good scare. Now on that day (Tuesday, right after MLK holiday) NASDAQ dropped by 136 points (1.9%)
Now look at the behavior – both days. the charts indicate the behavior. on 1/22 clear down trend and 136 point drop and $S5FI dropped 11 + % points. that is why IBD said on 1/23 day end – “Stock market bulls breathed a sigh of relief Wednesday as Wall Street endured another whipsaw session.”
Yesterday though the drop was significant. the volume was lower compared to 1/25 (Friday). it was a range bound day and closed at upper end of the range. and $S5FI dropped by only 1.6 % points.
and also both yesterday and on 1/22 the volume fell on both NASDAQ and NYSE exchanges.
another good sign for NASDAQ is that the candles are bouncing above their 10 days SMA.
as a side-note : NASDAQ volume is about 2.4 billion and the dollar volume is 120 Billion daily!! Now we let the Big dogs like pension funds, and mutual funds and Quant automatic computerized trading, ETF managers, hedge funds play it out in the day.
We are concerned only with end of the day price and the behavior during the day and psychological important Moving averages like 50 Days and 200 days. Somehow this along with major support and resistances. It gives us great relief and mental rigor when we avoid the fight during the day.
I am continuing to be in the market. Long QLD.
Happy trading !
It will not escape your attention ladies and gentlemen that for the last 8 trading days in NASDAQ since Jan 15th, it has closed above its 50 day SMA.
on 1/22 there was a drop and high to low difference of 130 points but still it bounced neatly above 50 day SMA and closed above the century figure of 7000, a good 20 points above it.
similarly on 1/23 a nice push up/buying pressure from low to close of 75 points, a good bounce above 50 days SMA can most importantly a close of 7025.5 points above the previous day’s close.
Closing price is critical and a close above 50 days SMA, a good bounce above it; and then above the century figure of 7025 and then above the previous day’s close…these all scream about one thing. The market is refusing to let go it’s gains. this is so unlike the previous 3 attempts to rally.
its good to see another good gains on 1/24 and 1/25.
IBD has this point “The interesting part is that the leadership is shared and broad, so far. Nine sectors are up about 7% this year, including electronics, energy, banks, software, finance, transportation, chips, S&Ls and retail.
Admittedly this is early to be identifying leaders. But if the trend holds and grows, the stock market could be looking at a rally with many players. What bull wouldn’t like that?”
For me i like this and am already long on QLD.
The delta market sentiment indicator is at 19.6 currently.
the percentage of S&P 500 stocks that closed below their own resepctive 50 days SMA has fallen to an extreme of 15 % (out of say 100 stocks, only 15 stocks are above their own 50 Days Simple Moving Average (SMA))
According to Delta newsletter – “Since January, 2009 through today, we have only had eight instances when the MSI declined below 20%. Shown below is a chart of the MSI since January 2, 2009. Buying the market when the MSI dropped below 20 previously during this bull cycle has benefitted patient investors willing to incur heightened market volatility”
When the Delta MSI drops below 10%, Delta’s MSI based strategies may buy stocks. During the current bull cycle beginning in 2009, this has happened only twice. Over the past 27 years, it has happened five times. These times were:
- August 1990
- September 1998
- July 2002
- October – December 2008
- August 2011
The chart below shows the price change in the S&P 500 from the closing monthly price when the MSI went below 10% to twelve months and three years later. The chart does not include the additional benefit of dividends during the holding periods.
Be prepared to enter soon into the market
So here we are
end of month and end of week, and end of quarter
the charts are beautiful and worthwhile
my decision : continue in QLD
Friday Sept 28th around 10:00 am IST 00:30 am just past midnight New York time
today would be the last trading day of the month and also the last trading day off the quarter
Yesterday prices faded as the day ended. In the above chart $S5FI – The percentage of stocks in S&P 500 that are above their 50 days SMA…they have fallen the entire week!
18 points fall from August 29th from 73 to 55.
last time from June 12th to June 28th s&p 500 fell 83 points and $S5FI fell 21 points .
So that is a red flag
but the A/D line for NYSE actually went up
So i am little confused. Why did the market fade away so badly yesterday ? What are stocks falling below their 50 day SMA?
Now price is the true north star so
my decision : I will continue to be long on QLD and I am also long on NQ
Tuesday Sept 25th 2018 around 10:30 am – 12:30 a IST, which is past midnight Tuesday 01:00 am – 3:00 am Tuesday New York Time
I have exited NQ with around 60 points gain. Looking at the above chart. biggest red candle in the number of S&P 500 stocks that fell below their 50 days SMA . Its a 10 point drop ! S&P 500 dropped little more than 10 points. Very great anomaly. for a 0.3 % drop in S&P 500 the number of S&P 500 MEMBERS that dropped below their 50 DAY SMA fell by 15%.
NYSE advanced declined line – 1918 stocks down on 2.3 billion volume. Only 896 stocks up on 992 million volume
one positive sign : NDX opened at 7477 with 45 points gap down from previous day close.
now that was the lowest too! It swung up 71 points to close around 17 point more than previous day’s close!
my decision : i have already exited NQ, I am continuying to hold on to QLD