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Day Trading. Index Trading. Technical Analysis. Stock Market. Market Commentary. Market Outlook. |
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Index Day Trading™ - Daily Market Analysis |
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Market Outlook
(Archive)
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- Learn Definitions used in our Market Outlook.
- Market Outlook Archive is updated on a daily basis.
Market Stage
(5/9/2008)
On Thursday we said that 'While the advancing SBV oscillator points to the possibility of a recovery, we still see selling volume accumulation which tells us that we may still face flat or down markets. The absence of the buying volume on the NASDAQ 100 index is not very promising as well.' Correspondingly, the indexes ended session lower today.
The 60-day SBV(20 period) chart shows a declining SBV oscillator. At session’s end we see the following SBV oscillator values: minus 22% on the NASDAQ 100, minus 37% on the S&P 500 and minus 33% on the DJI. The declining SBV oscillators point to the possibility of a further slide. However, we are starting to see buying volume accumulation on this chart. This buying volume clearly could be seen on the DJI and S&P 500 indexes while the Nasdaq 100 is somewhat behind. We will continue to monitor this chart setting in order to determine at which point SBV oscillator readings start to advance; this might then suggest better odds for the uptrend to resume.
The 1.5-year SBV(10 period) chart continue to shows a declining SBV oscillator. This is not a very good sign for mid-term uptrend, but the SBV is still at very high positive levels and this chart indicates that even if we have further move down, most likely it will be a correction within the dominant up-trend. Based on this chart, it could be premature to state that the current correction is a beginning of mid-term downtrend.
Market Status
(5/9/2008)
Market Performance:
Last Change Volume S&P 500 1,388.28 
9.40 (0.67%) 2,725,838 k NASDAQ 100 1,960.29 6.57 (0.33%) 660,818 k DJI 12,745.88 120.90 (0.94%) 591,339 k
The indexes could not overcome an early morning deficit as bad news out of the financial sector and surging oil kept the markets negative. The finishing results sees the NASDAQ 100 down 0.33%, the S&P 500 finished lower 0.67% while the Dow declined 0.94%. The negative week ends with the NASDAQ 100 down 1.09%, while the S&P 500 was down more at negative 1.81%, and the Dow closed down 2.39%.
The day ended with a daily volume of 2,726 million shares on the S&P 500. This volume was 18% less than the daily volume average of the past 3 months. This continues the string of less than average daily volume days.
NASDAQ 100 - 5/9/2008. 1-day Intraday, Modulated Volume.
Volume Analysis:
9:30 – 10:50 An early morning gap lower by the NASDAQ 100 left the index trading negatively for the first part of the day. The index was moderately lower than the previous close; down roughly one percent. However, the excess buying volume put in by the index at the tail end of yesterday’s session propelled the index higher. A typical target for the index is to close its opening gap. In this case the index retraced back to the closing gap where a large selling surge (A selling surge is a spike in the volume moving average that appears in the index volume pane and is accompanied by red – denoting selling volume - on the SBV oscillator pane.) was put in.
10:50 – 16:00 The index manifested the result of the selling surge in this time period. From an intra day gain of nearly 1%, the NASDAQ 100 began to trend lower. The move down was persistent and did not seem like “falling off a cliff” as some down trends do. At 12:00 and 13:30 there were episodes of heightened buying volume activity. The index did not move too close to the low put in during the opening session. But rather it responded to the buying volume by moving higher especially in the later parts of the day. Similar to yesterday however is the fact that there was a mix of volume in the later part of the day: it was not exclusively one type. The reason for that is that the index did move up and down within a small zone.
Short Term (lasts a few hours to a few days): With the trading week ended, we need to consider our last outlook:
“The movement of the next session is somewhat unclear. It could very easily move lower and generate more buying volume or it could start a modest move higher and continue for several sessions. The background is that there remains excess buying volume that should bring be the catalyst for more upward movement but enough selling volume to cause a downward slide. Our overall belief that over the short term there will be more weakness within a dominant mid-term up remains intact. It has been a mantra that we’ve repeated for several sessions.”
As it so happens the indexes did move slightly lower while generating some more buying volume. There was some short term weakness present.
For the NASDAQ 100, today’s actions were not very negative, however the other two indexes did not fare as well. They were relatively weak and have sustained greater losses. Our call will continue to be the same: over the short term there will be more weakness with a dominant mid-term up trend.
Analyst’s Daily Tip:
Charts: Resizing Charts
You can resize our charts to any size you desire. You do this in the same way you would resize any window. Simply click on the edge of a chart and drag it to adjust its size. This feature allows you to open as many charts as you want and to position them all on your screen.
Selling & Buying volume:
`Selling Volume` or `volume to the upside`, is volume that is being generated as the index is moving up. When we speak of `Buying Volume` or ‘volume to the downside’, we are referring to any amount of volume that is being generated as the index is moving down.
Financial Press Overview:
Trading was largely negative as crude continues to close higher. Crude closed at $125.88 per barrel on the Nymex – a new record. In fact the commodity has set a new record closing high every session this week. Other commodities did not fare as well. While crude was higher, the sector in general pulled back –1.5% after moving more than 2.0% yesterday.
In related news, FedEx lowered quarterly earnings on Friday, blaming surging fuel prices and a drop in demand. FedEx (FDX) shares finished down some 3 percent. The initial profit forecast was for $1.60 to $1.80 per share, however the new target will be $1.45 to $1.50 for the quarter ending May 31.
The lagging U.S. economy imported less from other nations. As a result the U.S. trade deficit narrowed sharply in March as demand for imports fell 5.7 percent from February (prior month). Consumers are battered by the housing slump, a credit crisis and inflation. This narrowing of the trade deficit is the biggest one month decline since December 2001 when the country was struggling to emerge from the last recession.
Key economic data for the week starting May 12th, 2008. Numbers shown are consensus estimates (market anticipates this value) and prior value.
| Monday: | |
 | 14:00 Treasury Budget Apr $157.5B $177.7B |
| Tuesday: | |
| 08:30 Export Prices ex-ag. Apr NA 1.2% 08:30 Import Prices ex-oil Apr NA 1.1% 08:30 Retail Sales Apr 0.0% 0.2% 08:30 Retail Sales ex-auto Apr 0.2% 0.1% 10:00 Business Inventories Mar 0.5% 0.6% |
| Wednesday: | |
| 08:30 Core CPI Apr 0.2% 0.2% 08:30 CPI Apr 0.3% 0.3% 10:30 Crude Inventories 05/10 NA 5654K |
| Thursday: | |
| 08:30 Initial Claims 05/10 NA 365K 08:30 NY Empire State Index May 1.0 0.6 09:00 Net Foreign Purchases Mar NA $72.5B 09:15 Capacity Utilization Apr 80.2% 80.3% 09:15 Industrial Production Apr -0.2% 0.3% 10:00 Philadelphia Fed May -20.0 -24.9 |
| Friday: | |
| 08:30 Building Permits Apr 912K 927K 08:30 Housing Starts Apr 940K 947K 10:00 Mich Sentiment-Prel. May 63.0 NA |
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