Most have noticed the NYSE Composite Index (NYA) is one of the few major indices that has yet to break its early April 2005 high, which is the next hurdle to be traversed before challenging the NYA all-time price highs achieved in early March 2005.
Since an index's internals often provide clues of the future direction of the index price, it perhaps a good time to take a look at a few NYA internal cumulative indicators to see what they are saying with respect to the NYA's probable price movement going forward.
The first chart is the NYA component cumulative AD line (currently at 2060 common stocks) with the focus on the 2005 action. Although the NYA component raw cumulative AD line is still about 3900 net advances short of its all-time high achieved in March, 2005, it has exceeded its April 2005 high, while the NYA price has yet to do so.
Chalk up one vote for the internals predicting the NYA price will take the first step of challenging its all-time price high by first taking out the April 2005 price high.
Now a look at the NYA component cumulative Up-Down (UD) volume line for 2005. Like the NYA cumulative AD line, the NYA cumulative UD line is still comfortably below its March 2005 highs, but it has positively diverged with price with respect to its April 2005 highs.
Although a baby step for challenging the March 2005 highs, another internal's vote for the NYA to exceed its April 2005 high.
Next is the NYA component cumulative dollar weighted volume line. This indicator is derived by multiplying each component's closing daily price by its daily volume, with all of the advancing component's results in one column, the declining component's results in another column, then calculating the net difference.
The NYA component cumulative $ weighted volume line is also suggesting the April 2005 NYA price high will not hold, thus setting the stage for an assault on the all-time NYA price highs posted in March 2005.
With quadruple witching transpiring next week the usual shenanigans associated with the event, may change the current NYA internals' configurations with respect to price, but at this juncture, the NYA component cumulatives are in lockstep, sending the message the NYA price is setting up for a challenge of its all-time highs.
One fly in the ointment thus far, is the NYA AD Ratio Adjusted Summation Index (RASI) has yet to exceed the all-important +500 level, as its NYSE composite AD RASI counterpart has already achieved. The NYA component AD RASI (not shown) is currently at +319 and its MCO (not shown) is at +25, thus it is time for the NYA component AD McClellan indicators to continue, and preferably increase, their recent strength. AD RASIs that do not exceed +500 during a robust price rally, are usually a precursor to price failures.