Price Time Volume Investing

The week ended with on a five day rally. Volume trailed off all week which is expected around the Thanksgiving holiday.

Reader and idea contributor Libby believes the chart of James River Coal Company (JRCC) is ready for a move up. I assume the recent drop occurred after news reports showed president-elect Obama is not a friend to the coal industry. What do the charts say?

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The price of natural gas continues to work toward the angle intersection near six dollars. Also, the Wilshire 5000 long term chart.

The charts of copper and West Texas Intermediate Crude shows very weak demand for either.

The 1987 bottom lasted 45 calendar days.

The SPX move yesterday was 45 days after the October 10th cycle turn. While the low of the 10th was not “the” low, price did not move much lower on the test. Also, RIMM bounced off 1×8 Gann angle.

The day certainly appeared interesting… until I looked at the volume. Volume was lower than Friday, but that was options expiration. But it was also lower than Thursday.

Here is a chart for the Gann traditionalist who like to watch for one point per day moves. The March to October 2007 range moved exactly one point per day.  When using Gannalyst, this means to scale the price fan to 1.0 (which is the default).  Rarely do moves occur at exactly one point per day. 

The market looks to be in the last leg of this current correction.

Volume was up but that was most likely associated with options expiration. The SPX reversed but ended lower than yesterday’s high. The market may move higher from here, but nothing in the charts says it is probable.

The charts of these major indices have not moved beyond the 2000-2002 bear market low. The SPX must contain more financial stocks that are heavily weighted as compared to the other indices.

The 10 year Treasury yield has dropped over 16% this week and over 8% today. It looks like a mad rush out of stocks and into bonds. Inflation is not a problem the market is concerned about at this time.

The major bull market range of 1982-2000 is nearing the 50/50 point in price and time. Price is at a 50% retrace in one-half of the time of the bull market.

Cheer up. Your losses can’t be as big as Uncle Warren’s.

The ten year bond yield is at levels from the early 1960s. Price essentially followed the slope down that it followed up from the sixties to the early 1980s.

Price reversed to the upside on volume today. I am still waiting for price to take out the October 14th high before I get interested again.

In order for the market of stocks to bottom, the leading stocks in the market must bottom. This five week consolidation has provided time for the leaders to form bases.

Tomorrow is day four of the move off the lows last week. The market remains in position to move higher as price is above the low of the high volume up day last week. Tomorrow would be a good day for another big up bar on volume. I don’t have any idea if we get it. But a second thrust up on day four would be encouraging.

An update of some charts I have posted in the past that measure prices on some commodity indices. These measure some aspect of inflation, lack of inflation, or deflation. I do not see anything inflationary for at least six months