Price Time Volume Investing

The Nasdaq 100 (NDX) had another low volume down day today and is in the process of working off an overbought condition. Because volume was slightly higher than yesterday, (but well under the 50 day average), today was a minor distribution day. It still looks like there are not many sellers… just fewer buyers. Price bounced off the 1:1 descending Gann angle but looks set to break through after it regroups.

The Nasdaq Advance-Decline metric shows the 10 day moving average is back to neutral while the 5 dma is in negative territory. I would not expect more than another day or two of this correction. Note that while the breadth is backing off, the volume is so light that no real damage is done. So far, this is a perfect retrace after a strong thrust.

The McClellan Oscillator is still overbought and may take a few days for it to back off enough to break through the resistance from the 1:1 angle on the NDX chart.

Charts courtesy of Stockcharts.com

Post Modified: August 19th, 2008 at 8:04 pm

Tags:   Advance-Decline · Distribution Day · Gann Angle · Market Internals · McClellan Index · NDX · Square of Range · VolumeNo Comments.

The Gold ETF (GLD) hit the 150 calendar day cycle yesterday and may be ready for a bounce. A 50% retrace would go back to 88 or 880 on real gold. The retest of the high hit exactly on the 120 cycle.

Crude could move back to the 50% retrace of the range of the move starting in 1999. It looks to me like oil will come back to the $105-85 level eventually. The long term chart shows the 1:2 angle (half the slope) of the 1999-2008 move as the true slope of the move. The blowoff phase moved up to two times the actual slope. The mid-point of the range is near $80ish. Note the 1:2 angle is twice the long term declining slope from 1990-1999.

The shorter term chart from 2007-2008 shows a mid-point near $100.  Price could bounce from here but a higher percentage trade would appear if price hit the 1:2 ascending Gann angle.

Charts courtesy of Stockcharts.com

Tags:   Energy · Slope · Square of RangeNo Comments.

I read today that the next couple weeks are historically very low volume affairs. I guess everyone is shopping for back to school specials. It sure looks that way according to the Aeropostale Inc (ARO) long term chart.

The Nasdaq Composite Index (COMPQ) has had five lower volume days in a row. This is a positive way to work off an overbought condition.

The Smallcap SP600 Index (SML) looks even stronger. This is the 23rd trading day off the low and a move back to the 50 day moving average with few buyers is very possible.

Charts courtesy of Stockcharts.com

Post Modified: August 19th, 2008 at 8:01 pm

Tags:   COMPQ · Growth Stocks · NASDAQ · VolumeNo Comments.