Tuesday, December 10, 2013

Of Things To Come- S&P 500 Price/Volume Heat Map Dec. 9

Although the market gained in yesterday's trading, with a 20 basis point increase in value, the overall setup does not look constructive. You should not take this statement as if it is a short call or some sort of imminent warning. I am not that smart to call the exact top. However, we are definitely seeing signs of weakness here as equity prices have hit the late November highs.

For one, total volume levels on the uptrend that began December 6 have been generally weak and have tapered off as equity prices gained. Additionally, the cumulative advance/decline line, in my mind, does not support strong depth in equity price gains. More so, just look at the demand trends in the price/volume heat map below. Although overall prices gained, there just does not appear to be any support for this prices, as demand was relatively weak across the board. The trading just does not scream a strong follow through following the Friday's rally and may be an indication of things to come. It goes without saying that you should watch where the volume comes in to the market.

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