All donations go towards web site maintenance for all of Technical Watch,
keep it free of charge, and may be tax deductable as an investment expense.


PayPal Verified
Join our market chat sessions every Tuesday and Thursday at 4:00 pm Pacific time!
More information on subscriber services can be found at
http://www.technicalwatch.com/subs.htm




Support Technical Watch!
Buy from our Book Store!
Register Calendar Latest Topics
 
 
 


Reply
  Author   Comment  
mortiz

TW Patron++
Registered:
Posts: 1,054
Reply with quote  #1 
Thursday (6-7-07) the NYSE down volume percentage was very close to 95% which is a rare event, and has positive price influences going forward, a study following the late February 2007 +95% down volume day can be found at this link:

http://forums.technicalwatch.com/tool/post/fib_1618/vpost?id=1757816

The SPX was just under 1400 that day, and ultimately bottomed in the 1375 zone within a couple of weeks. Although it is highly possible we may see further price weakness, the down side price risk following a 95% down volume day is moderate (2% to 4%).

To illustrate the one sided selling pressure on Thursday, here is the High-Low-Close (HLC) Price-Change-Volume ($PCV) indicator that measures the selling pressure in an index from each index component's price high and price low for the day question.  The SPX HLC $PCV indicator is the most extreme in the three years of data I have available for the index.  Such extremes are likely signaling a price low retest following any reflex rally, but I have nothing to compare with such an extreme.  The bottom line, is this intraday selling pressure tool is suggesting Thursday's action was heavy on capitulation.



Same extreme on the NDX HLC $PCV indicator following Thursday's action.



Normally, extremes in this indicator as generated Thursday are good for an immediate bounce, which we are getting today, but more importantly, this tool is saying the internals momentum lows are likely in, although there is a good chance more work needs to be completed in completing the bottoming process.

FWIW

Randy
0
Previous Topic | Next Topic
Print
Reply

Quick Navigation:

Easily create a Forum Website with Website Toolbox.






Copyright 2000-2017 Technical Watch