My Price/Volume Diffusion Index is hanging in there, flat-lining at about the 54 demarcation for about two weeks. This follows a rather abrupt decline from the high 60's just a few week ago. The decline in the diffusion index came as volume came in on the downside in conjunction with weaker upside volume levels. This while the S&P 500 traded sideways from about mid-march through the beginning of the April. Since the beginning of April, the the market has moved in small inverted V formation with very little volume conviction one way or another, outside of the sell off on April 15 of course. The later set up has led to the recent trend (or lack there of) in the Price/Volume Diffusion Index.
The chart of the Diffusion Index through today is shown below.
As for the rolling summation index, the trend is still up, and this in conjunction with the diffusion index that remains above 50 indicate that the market may trade higher or at the very least sideways in the near-term. However, the summation index is showing a pattern of contracting time periods between each successive peak. This indicates, to me, a tendency of traders/investors becoming less patient with the market and are buying the dips sooner. Does this suggest that the deck is becoming stacked? We shall see. The latest updated summation index is shown below
The chart of the Diffusion Index through today is shown below.
As for the rolling summation index, the trend is still up, and this in conjunction with the diffusion index that remains above 50 indicate that the market may trade higher or at the very least sideways in the near-term. However, the summation index is showing a pattern of contracting time periods between each successive peak. This indicates, to me, a tendency of traders/investors becoming less patient with the market and are buying the dips sooner. Does this suggest that the deck is becoming stacked? We shall see. The latest updated summation index is shown below
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