In this exclusive StockCharts TV video, Joe shares the MACD downside crossover signal and explains the different ways it can play out when it takes place above the MACD zero line. These downside crossovers can lead to opportunities depending on other criteria, including the ADX action. He then shows how this pattern is playing out in big name stocks like NVDA and LLY, as well as Bitcoin right now. Finally, he goes through the symbol requests that came through this week.

This video was originally published on October 16, 2024. Click this link to watch on StockCharts TV.

Archived videos from Joe are available at this link. Send symbol requests to stocktalk@stockcharts.com; you can also submit a request in the comments section below the video on YouTube. Symbol Requests can be sent in throughout the week prior to the next show.

At some point, this raging and relentless bull market has to slow down.  Right?!?  But as you’ll see from a quick review of three key market sentiment indicators, there could still be plenty of room for further upside in risk assets.

Today we’ll break down three of the market sentiment indicators I’m following to track a potential market top, and along the way I’ll share how a contrarian mindset could help investors navigate a volatile Q4!

Put/Call Ratio Hits an Extreme Low Reading

Let’s start with a measure of positioning in the options market, looking at the volume of put options (implying a bearish bet) vs. call options (indicating a bullish bet).  I’m using the equity put/call ratio here, which ignores the volume in index options and focuses instead on individual stocks.

Since this is a fairly noisy data series, I’m showing the raw data in gray and smoothing out the day using a 5-day simple moving average in pink.  You may notice that last week the raw data reached its lowest level since July 2023, indicating heavy bullish positioning.  As a contrarian measure, this suggests to me that perhaps the options market is way too bullish as the S&P 500 pounds to new all-time highs.

AAII Survey Has Not Reached Euphoric Levels

While the put/call ratio has reached an extreme reading, I would not say the same for the AAII survey.  This weekly survey of the members of the American Association of Individual Investors often becomes overheated toward the end of a bullish market phase, with the percent of bulls pushing above 50% of respondents.

Last Thursday’s reading came in just below that, registering a 49% bullish reading, with bears representing around 21% of the survey participants.  So while there are way more bulls than bears, until the bullish reading pushes above 50%, I’m inclined to assume there could be more upside before I would label this as a “euphoric” reading.  Note how most of the swing highs over the last 18 months have seen a bullish reading above 50!

NAAIM Exposure Index Implies More Upside Potential

While the AAII survey involves a group of individual investors, the NAAIM Exposure Index features responses from active money managers who are members of the National Association of Active Investment Managers.  This survey asks for participants to share their current allocation to equities, and responses can range from -200% to +200%.  

The latest reading here was around 90%, similar to the levels we’ve seen over the previous four weeks.  If and when this indicator gets above 100%, implying respondents are leveraged long equities, I would consider the indicator to be in the euphoric range.  And when indicators like this get to a level implying pretty much everyone is long equities, I begin to wonder whether a contrarian sell signal is right around the corner.

I love being able to combine different sentiment indicators into one “master” chart, so I can easily track their signals and look for confirmation across different technical approaches.  With that in mind, I’ve created a Master Sentiment Chart to help identify if and when these indicators confirm a euphoric level as investors get a little too bullish.

Note that this is a weekly chart and provides a good overview of sentiment indicators.  Be sure to review the daily charts for further detail, and remember that mindful investors recognize the price, breadth, and sentiment can and should be used together!

For more on these sentiment indicators and how I’m tracking their signals in October 2024, check out my latest video on StockCharts TV.

RR#6,

Dave

PS- Ready to upgrade your investment process?  Check out my free behavioral investing course!

David Keller, CMT

President and Chief Strategist

Sierra Alpha Research LLC

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice.  The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.  

The author does not have a position in mentioned securities at the time of publication.    Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.

Semiconductors sold off on Tuesday, crushing the Technology sector. But the Real Estate sector didn’t suffer a similar fate; in fact, it was the top sector performer for the day. 

The Real Estate Select Sector SPDR Fund (XLRE) reached a 52-week high in mid-September, but has pulled back since then. However, Tuesday’s price action suggests that XLRE may be on the verge of recovering from correction territory. One of XLRE’s top holdings is American Tower Corp (AMT), which happens to be in the top 5 in the Large Cap Top Up StockCharts Technical Rank (SCTR) category.

FIGURE 1. SCTR REPORT FOR OCTOBER 15, 2024. American Tower (AMT) was in the top 5 in the Large Cap Top Up category.Image source: StockCharts.com. For educational purposes.

AMT operates and leases cellular towers to multiple carriers. As bond yields fall, cell tower Real Estate Investment Trusts (REITs) benefit from lower borrowing costs. And when interest rates decline, AMT’s 2.8% dividend yield may be another reason to own the stock.

Technically Speaking

Looking at the weekly chart of AMT (see below), the stock price is trading above its 26-week simple moving average (SMA) and is trying to stay above its 61.8% Fibonacci retracement level. Its SCTR score is just above 70, and the relative strength index (RSI) is trending higher toward 70.

FIGURE 2. WEEKLY CHART OF AMERICAN TOWER STOCK. The stock price is gaining momentum, so keep an eye on the indicators to ensure momentum is still strong enough to take the stock price higher.Chart source: StockCharts.com. For educational purposes.

The more recent series of higher highs and higher lows is an indication that the trend could continue to go higher. Let’s see what story the daily chart of AMT tells.

FIGURE 3: DAILY CHART OF AMERICAN TOWER STOCK PRICE. The breakout above the 50-day SMA, a potential MACD crossover, and rising OBV all support an upward move in AMT.Chart source: StockCharts.com. For educational purposes.

After bouncing above a support level (blue dashed line), the stock price crossed above its 50-day SMA. It’ll have to show a series of higher highs and higher lows to support the upward trend in price. There needs to be momentum for that to occur, and two good indicators to gauge the momentum are the moving average convergence/divergence (MACD) and On Balance Volume (OBV).

The MACD line could soon cross over the signal line just below the zero line. The closer the crossover is to the zero line, the more confident I feel about the sustainability of the uptrend.

Meanwhile, an OBV crossover above its 50-day SMA would further confirm the uptrend in AMT. 

If the price action follows through on the upside, AMT could reach its September 10 high, after which its all-time high would be the next destination. The weekly chart shows a few clear resistance levels along the way.

The one concern is that a head-and-shoulders top could form on the weekly chart. If that were the case, price could fall below the 50% retracement level and 26-week SMA.

Trading AMT

I wouldn’t enter the trade until the price exceeds $234.50 (left shoulder). That gives it time to display a series of higher highs and higher lows on the daily chart. I would place a tight stop below my entry point and stay in the trade if the momentum remains strong. The first target would be the 52-week high. If it exceeds that, I will ride the trend for as long as possible. Once the momentum starts waning, I’d exit my position.

If price moves in the opposite direction, i.e. if a head and shoulders top is formed on the weekly chart, all bets are off. I’d delete this chart from my ChartList. There are plenty of other opportunities.

The bottom line: Set an alert for when AMT crosses above $234.50. When you get the notification, head over to the weekly and daily charts of AMT, which should be saved in one of your ChartLists, and revisit the indicators. Are they still showing bullish momentum? If so, enter a long position, but know where your stops are before you place the trade.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

When Wall Street rings its opening bell, there are two things you need to do to start your day:

Get the big picture on what’s happening in the markets. Spot the market opportunities, especially the ones that aren’t apparent.

There are plenty of ways to get your market updates. The slowest way would be to tune into financial news, scroll through headlines, and read all the articles. Now, you may end up doing that anyway; it’s always a temptation. But why not start your day with a fast scan? This is what StockCharts’ MarketCarpets was designed to do.

Get the Big Story

It’s Monday morning, and the S&P 500 ($SPX) continues to drive into record-high territory.

Log onto your StockCharts account and, from Your Dashboard:

Click Charts & Tools > MarketCarpetsSelect S&P 500 from the Select Group dropdown, Performance from the Measurement dropdown, and 1D Change from the Color By dropdown.

Below is a more comprehensive snapshot of what’s happening from a price-performance viewpoint.

FIGURE 1. MARKETCARPETS SNAPSHOT OF THE S&P 500. This view is measured by market performance.Image source: StockCharts.com. For educational purposes.

What’s this telling you? Technology stocks are driving up the S&P 500, with Nvidia (NVDA), Qualcomm (QCOM), Applied Materials (AMAT), and Adobe (ADBE) among the bigger players leading the way. You can also view this on the summary on the right side of the carpet view.

The sectors from the middle to the right also show a lot of red, with stocks declining. Health Care, Consumer Discretionary, Industrials, Consumer Staples, Materials, and especially Energy are having a rough start early in the day. This gives you the real-time performance of the stocks in the index.

But which stocks might be strengthening or weakening from a technical perspective? This is something that a snapshot of price will not immediately tell you. So, let’s switch over to the StockChartsTechnicalRank (SCTR) measurement to find out. 

Select SCTR from the Measurements dropdown. Below is a snapshot of the MarketCarpet measured by SCTR colored by 1D change.

FIGURE 2. SNAPSHOT OF THE S&P 500 MEASURED BY SCTR. This view shows a different performance perspective of stocks in the S&P 500.Image source: StockCharts.com. For educational purposes.

StockCharts Tip: To see which stocks have high and low SCTR values at a specific time, select Latest Value from the Color By dropdown menu.

 So, what is this telling you, in contrast to the previous view? First, it tells you that many stocks within each S&P sector are technically weakening. Second, it calls your attention to certain stocks that might be technically strengthening or weakening regardless of their intraday performance.

QCOM showed dark green on both carpets, indicating strong performance and increasing SCTR score. Let’s zoom in on a daily chart of QCOM.

FIGURE 3. DAILY CHART OF QCOM. Is the stock on the verge of a breakout?Chart source: StockCharts.com. For educational purposes.

QCOM looks like it’s on the verge of breaking out from an ascending triangle pattern, which, as you know, is bullish.But it also shows a slight bearish divergence in momentum as buying pressure, according to the Chaikin Money Flow, is dwindling.While the SCTR line (above the chart) is improving, it’s also fluctuated within a range over the last two months.Overall, you’ll want to see what happens after the breakout if or when it comes.

Now, let’s look at a daily chart of AMAT, which also showed a positive intraday performance on MarketCarpets, but a more lukewarm performance on the SCTR view.

FIGURE 4. DAILY CHART OF AMAT. Note the difference between AMAT’s and QCOM’s charts despite similar performances and SCTR readings.Chart source: StockCharts.com. For educational purposes.

AMAT’s SCTR score on MarketCarpets may not be anywhere near its one-day performance by price, but it may be enough to call your attention to do a deeper dive. In contrast to QCOM, AMAT’s SCTR line is rising (as shown in the panel above the chart). AMAT is also on the verge of a breakout. 

Unlike the QCOM example, however, AMAT double-bottomed (see blue circles). At the same time, its momentum on the CMF shows an overwhelming bullish divergence (see black arrows) while buying pressure (see blue rectangle) is in the green.

What You Can Do Now (Action Points)

What you saw was just a quick and dirty overview of what you can do as part of your morning scanning routine using MarketCarpets. Try these:

Add stocks that pique your interest to a ChartList using this method.Scan other indexes, such as the Dow Industrials and Nasdaq 100, for a broader market overview; other opportunities might be hidden in other market areas.Scan sectors and look at their seasonality profiles to understand which stocks may be ramping up this time of year.Toggle between lookback periods to distinguish sudden changes from those that are slowly developing.Change measurements to the various available indicators, such as the Relative Strength Index (RSI), Bollinger Bands, Full Stochastics, and more, especially if you use any of these indicators for your charting.

Here’s the main point: It’s about getting a fast, comprehensive. and multi-angled overview. The more you can see—quickly and efficiently—the more opportunities you can find with greater ease and without wasting time.

At the Close

MarketCarpets is your go-to for a fast, no-nonsense market scan. It helps you quickly analyze market trends and spot hidden opportunities by toggling between performance and other technical indicators like SCTR. This allows you to identify which stocks are heating up (or cooling down) without wasting time on endless headlines. Add this to your morning routine and seize opportunities quicker than ever.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation or without consulting a financial professional.

Which market sentiment indicators should we follow to validate the current bull market phase and anticipate a potential market top? David Keller, CMT breaks down three sentiment indicators he’s watching in October 2024, explains their calculations and methodology, reviews their signals during previous bull market cycles, and describes a “market top playbook” for market sentiment.

This video originally premiered on October 14, 2024. Watch on our dedicated David Keller page on StockCharts TV!

Previously recorded videos from Dave are available at this link.

It’s time to put Semiconductors in the spotlight. NVDA is starting to trade at all-time highs again and that is likely to bring the Semiconductor industry group up to its own all-time highs. Erin discusses Semiconductors “under the hood” and highlights the NVDA chart.

Carl brings his unique analysis of the market and key areas of the market like Bitcoin and Gold. The Dollar is also in the spotlight with its move ever higher.

A look at the Magnificent Seven rounds out Carl’s presentation.

Erin covers Sector Rotation in detail. Which sectors are poised to go higher and which sectors are already cooking. She highlights one sector that you shouldn’t count out right now.

The pair finish with a look at viewer symbol requests and answer questions on yields.

01:01 DP Signal Tables

04:25 Market Analysis and Overview

14:32 Magnificent Seven

20:00 Sector Rotation

26:48 Semiconductors & NVIDIA (NVDA)

31:20 Questions

36:23 Symbol Requests

Always find the latest DecisionPoint videos on our playlist HERE. Bookmark it!

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Technical Analysis is a windsock, not a crystal ball. –Carl Swenlin

(c) Copyright 2024 DecisionPoint.com

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

DecisionPoint is not a registered investment advisor. Investment and trading decisions are solely your responsibility. DecisionPoint newsletters, blogs or website materials should NOT be interpreted as a recommendation or solicitation to buy or sell any security or to take any specific action.

Helpful DecisionPoint Links:

Trend Models

Price Momentum Oscillator (PMO)

On Balance Volume

Swenlin Trading Oscillators (STO-B and STO-V)

ITBM and ITVM

SCTR Ranking

Bear Market Rules

Good morning and welcome to this week’s Flight Path. Equities saw the “Go” trend not just survive but stay strong this week as the indicator painted a week of uninterrupted bright blue bars. Treasury bond prices stayed in a strong “NoGo” trend this week with consecutive purple bars. The U.S. commodity index is seeing its “Go” trend strengthen with a strong blue bar and the dollar seems set in its “Go” trend as well.

$SPY Able to Set New Higher High

The GoNoGo chart below shows that resurgent strength has pushed price to new highs on strong blue “Go” bars. This came after GoNoGo Oscillator found support twice in quick succession at the zero line. This caused the chart to show multiple Go Trend Continuation Icons and that new momentum in the direction of the trend was enough to push price higher.

The longer time frame chart shows us that GoNoGo Trend painted another strong blue “Go” bar this past week and we see another higher close on this weekly chart. We are now in a period of consecutive strong blue bars as the trend continues higher. Having taken out the prior high we turn our eye to the oscillator panel where we see that momentum is in positive territory but not yet overbought.

New “Go” Trend Strengthens in Yields

Treasury bond yields are in a “Go” trend now that has seen the indicator move through aqua bars to stronger blue “Go” colors. This comes as price closes in on some potential resistance from previous lows in the last “NoGo” trend. GoNoGo Oscillator is coming out of overbought territory and so we see a Go Countertrend Correction Icon warning us that price may struggle to go higher in the short term. We will then watch to see what happens should the oscillator close in on the zero line.

The Dollar Races Higher in New “Go” Trend

Price continued to climb this week as it raced through aqua bars and into bright blue “Go” colors. As GoNoGo Oscillator fell from overbought levels, we see that there is a Go Countertrend Correction Icon that indicates price may struggle to go higher in the short term and we will watch to see if it can consolidate at these elevated levels without falling too much from the high.

The week that went by was in complete contrast to the week before as the markets heavily consolidated in a tight range. In the week before this one, the Nifty had seen a significant retracement of over 1167 points; however, over the past five trading days, the index stayed totally devoid of any directional bias and ended the week on a flat note. The volatility also tapered down; the India VIX came off by 6.42% to 13.22 on a weekly basis. The trading range also got much narrower; the index oscillated in a range of 539.70 points. Following some strong consolidation, the headline index closed flat with a minor weekly loss of 50.35 points (-0.20%).

The coming weeks are crucial for the markets from a short-term perspective. The NIFTY Bank and FINNIFTY will cease to have weekly contracts beginning November 20 following the SEBI’s recent directives. It will be only NIFTY that shall have weekly contracts. This may keep the indices a bit volatile over the coming days. Importantly, the Nifty’s behavior against the 25000-25050 zone is important as the 25050 is where the 50-DMA is, and the 25000 level remains a psychologically important level. The markets were anyway highly deviated from the mean. The nearest 20-week MA stands at 24541; the Nifty has not even tested this level during the recent retracement. Even if that is tested, the primary uptrend would still remain very much intact.

The coming week may see a tepid start; the levels of 25100 and 25365 shall act as probable resistance points. The supports coming in lower at 24800 and 24540 levels.

The weekly RSI stands at 59.09; it remains neutral and does not show any divergence against the price. The weekly MACD has shown a negative crossover; it now trades below its signal line.

The pattern analysis shows that the week’s low point of 24694 found support at the extended rising trendline. This trendline was drawn from the level of 22124 and it extends itself joining the subsequent high points. It is important to note that this low point coincides with the 20-week MA; the fastest and the nearest weekly MA which stands at 24541. This makes the zone of 21540-21700 a very important pattern support zone for the Nifty.

All in all, we have a lot of short positions as reflected by the derivatives data. Speaking specifically for the coming week, Nifty’s behavior vis-à-vis the level of 25000-25050 would be crucial to watch. On the other hand, the strikes of 25000 hold a co-existence of the highest Call and Put OI; this makes this level almost an inflection point for the Index. For the Nifty to extend its technical pullback that it attempted in the previous week, it must move past and keep its head above the 25000-25050 zone. It is strongly recommended that we stay invested in stocks that show strong relative strength; this would ensure resilience if the markets do not move in our intended direction. A cautious approach is recommended for the coming week.

Sector Analysis for the coming week

In our look at Relative Rotation Graphs®, we compared various sectors against CNX500 (NIFTY 500 Index), which represents over 95% of the free float market cap of all the stocks listed.

Relative Rotation Graphs (RRG) show Nifty Pharma, Services Sector, IT, Consumption, and FMCG indices inside the leading quadrant. Although the FMCG index is showing a decline in its relative momentum, these groups are by and large likely to relatively outperform the broader markets.

Nifty Midcap 100 and  Auto Index are inside the weakening quadrant. They may, however, continue to show stock-specific performance while relative performance may keep slowing down.

The PSE, Infrastructure, Realty, Metal, Nifty Bank, PSU Bank, Energy, Commodities, and Financial Services indices are inside the weakening quadrant. However, except for Commodities, Energy, and PSE indices, the rest are seen sharply improving on their relative momentum.

The Nifty Media index is the only index inside the Improving quadrant. However, it is seen giving up its relative momentum as well against the broader markets.

Important Note: RRG™ charts show the relative strength and momentum of a group of stocks. In the above Chart, they show relative performance against NIFTY500 Index (Broader Markets) and should not be used directly as buy or sell signals.  

Milan Vaishnav, CMT, MSTA

Consulting Technical Analyst

www.EquityResearch.asia | www.ChartWizard.ae

The Cybersecurity ETF (CIBR) is resuming the lead as it surged to new highs this past week. It is important to note that CIBR began its leadership role a lot earlier because it hit a new high in late August. Today’s report will analyze the recent breakout and suggest some possibilities in the future. 

First notice that the Technology SPDR (XLK) and five tech-related ETFs are leading in October (semis, cybersecurity, software, fintech and cloud). They are up 2% or more and easily outperforming the major index ETFs (SPY,QQQ,IWM). The tech ETFs underperformed in July-August and are now getting their mojo back.

I featured CIBR in Art’s Charts on September 14th, demonstrating how to use the Percent above MA (5, 200) to define the trend and reduce whipsaws. In an long-term uptrend, stocks and ETFs experience both trending and non-trending periods, with the latter often lasting longer.

The chart below shows CIBR trending higher from late October 2023 to mid-February 2024, less than four months. A non-trending period followed and lasted over six months. Most recently, the ETF broke out of this range and entered a new trending period. I expect this trending period to last a few months and prices to extend higher.

The breakout zone around 59 (red line) turns into the first support area to watch in case of a throwback. Throwbacks occur when prices fall back to the resistance zone after a breakout. Overall, support is marked in the 59-60 area, and a pullback to this zone would provide a second chance to participate in the breakout.

TrendInvestorPro is focused CIBR, tech-related ETFs and tech stocks as they move from corrective non-trending periods to trending periods. We think the market is looking past the elections and toward seasonal patterns, which soon turn bullish. Opportunity awaits! Click here to learn more.

Special Offer!! 

2 Educational Reports/Videos with Every Subscription

“Finding Bullish Setup Zones with High Reward Potential and Low Risk”. The trend is your friend, and pullbacks within uptrends present opportunities. We show how to find compelling setups that combine market conditions, trend identification, oversold conditions and trading patterns. Trading is all about the odds and these setups put the odds in your favor.

“Using Breadth for Capitulation, Thrusts, Market Regime and Oversold Conditions”. This report covers four ways to utilize breadth indicators. Capitulation conditions often signal major lows, while thrust signals indicate the start of a bullish phase. Market regime helps distinguish between bull and bear markets, and oversold conditions identify tradable pullbacks within bull markets. We explain the indicators, settings, and signals for each scenario.

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Highlights from Recent Weekly Reports/Videos:

October 4th Report: We identified bullish breakouts in several tech-related ETFs (QQQ, XLK, MAGS). Additionally, we noted continued strong performance from software and cybersecurity (IGV, CIBR). The report also showcased bullish continuation patterns for three leading AI stocks and identified two bullish setups in the healthcare sector.

September 19th Report: We began with our breadth model, which has maintained a bullish stance since December 7th. Narrowing yield spreads continue to show confidence in the credit markets. The report featured bullish setups in ETFs related to copper, base metals, copper miners, and palladium (CPER, DBB, COPX, PALL).

Click here for immediate access!

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I was asked recently about volume, specifically why I don’t feature volume often on my daily market recap show, CHART THIS with David Keller, CMT.  I replied that when I was learning the technical analysis toolkit earlier in my career, I very much paid attention to volume indicators.

But in the years to follow, I developed a process that focused more on trend and momentum, and I felt the approach worked quite well despite the lack of volume inputs.  But there is one indicator that has been fairly successful at recognizing market turns over the last year, and it’s a chart I will be following closely in the weeks to come.

Volume to Chaikin Money Flow

First, let’s talk about how we measure volume over time.  The easiest way to represent volume is with the daily volume bars, helping us determine if today’s volume is above or below average.  And while that can be helpful for navigating the short-term environment, it doesn’t help us assess how volume is evolving over time.

Famous strategist Joe Granville developed the concept of “On Balance Volume” where he created a cumulative total of volume by adding up days’ volume and subtracting down days’ volume.  Similar to an advance-decline line, it does help to indicate the general directional trend in volume.

The issue here is that we’re taking an entire day’s volume and considering it all bullish or all bearish, depending on whether the close was higher than yesterday.  What about if we finished at the high or the low of the day.  Shouldn’t that matter in some way?

An Advance-Decline Line for Volume

Another legendary technician, Marc Chaikin, improved on Granville’s work by looking at every day’s price bar.  If the close was closer to the high, then that day’s volume should be worth more in the running total.  And if the close was near the middle of the range, that day’s volume should be worth less in the calculation.

Now we can see the running total of daily volume, but with more value given to the days with highs near the high or low for the day.  So big up days and down days become much more important when we consider the overall trend in volume.

When the indicator is above zero it’s shaded green, and long-term uptrends often feature extended periods of green.  When the indicator is below zero, represented with the red shading, this suggests a period of distribution as the down volume appears heavier.

Watching for Volume Divergences

While crossing below the zero line would represent a general rotation in volume from more accumulation to distribution, the real benefit of this indicator is in the early warning sign based on divergence.

As the market was moving higher in July 2023 into the eventual August high, we saw a decline in the Chaikin Money Flow.  We observed a similar pattern in March 2024, as the SPY pushed higher even as the CMF was trending lower, as well as in July 2024.

Notice how the current reading shows the Chaikin Money Flow reading as still quite strong for the S&P 500?  This suggests that the market is still in a position of strength, given the stronger bullish volume in recent weeks.  But this chart also tells us to keep a wary eye on the CMF in the coming weeks.  Because a bearish divergence here could provide an early warning sign to mindful investors staying attuned to the rhythm of the markets.

Heads up!  We just launched our new podcast, Market Misbehavior with David Keller, CMT, in October!  Check out our recent interviews with Mark Newton, Joe Rabil, Mish Schneider, and Mike Livingston.  Lots more great conversations coming your way very soon!

RR#6,

Dave

PS- Ready to upgrade your investment process?  Check out my free behavioral investing course!

David Keller, CMT

President and Chief Strategist

Sierra Alpha Research LLC

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice.  The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.  

The author does not have a position in mentioned securities at the time of publication.    Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.