an tSionna 5.26.09 Trading Range

Another chart of the SPY using some of our more proprietary indicators. Again double click on chart to make it bigger. Shorter term it is more of the same story. Pink lines show the trading range we've been in (and endlessly discussed) since last fall. One of our proprietary indicators of demand (# 1 above) flipped positive back in April and right now shows no signs of rolling over. This is an intermediate term indicator-measuring markets in increments of weeks and shows us that right now there are buyers willing to put money to work on pull backs of stocks.

Number 2 shows some more of our proprietary indicators. These measure whether markets are over bought or over sold. Currently these are showing declining trend lines. This indicates that stocks are beginning to work through their over bought condition. Remember we discussed over the weekend that stocks can work out being over bought by price (a declining market) or time (churning going nowhere). These indicators declining while stock prices essentially go nowhere indicates more of a churning market at this time.

*Long SPY and other ETFs related to the S&P 500.