BarroMetrics Views: S&P 2012-05-10 Again

Today I took out my original shorts (1366) and another smaller set at  1353 (initiated yesterday).

FIGURE 1 shows why.

After the price action on May 7 (DOJI day). I expected to see:

  1. On May 8, a smallish range day with a lower low and lower high (when compared to May 7); and
  2. On May 9, a strong day down.

Instead what we have seen is:

  • On May 8, an average range down day  that left a strong buying extreme; and
  • On May 9, a day that negated May 8’s buying extreme and replaced it with a buying extreme of its own.
  • On both days, the S&P cash, failed to close in the bottom 2/3s of its range.

That’s the price structure, what about the volume picture?

On both days, we see above average volume and we see increased volume on May 9. But the resultant downward move is not keeping pace with volume generated.

The chart pattern appears to be setting up for a buy. And while the buy pattern is far from complete, given the current picture, I am unwilling to hold my shorts. Hence the exit.

nvd.png

FIGURE  1 S&P, Cash, Normalised Volume

Refer this blog post to a friend or colleague…
bookmark bookmark bookmark bookmark

Tech tipsComputer Tricks