Wed September 16th 2009
Indices Extremely Overbought as Rally Rolls Onby Harry Boxer,
www.TheTechTrader.comThe markets were choppy early on, although they did have a positive opening. They then backed off, rallied again, backed off again, but then came on with thrust, spiking up to 1720 on the Nasdaq 100 and 1065 on the S&P 500 before backing and filling and retesting.
Later on in the afternoon they moved to even higher levels. The NDX reached 1724.67, closing at 1723.73, less than a point off its high, up 24.20. The SPX rallied to close at 1068.76, the high for the day going away, up 16.13. The Dow closed just under 9800 at 9791.71, up 108.36.
The technicals were very positive by 5 to 1 on advance-declines on New York and 2 ½ to 1 on Nasdaq. Up/down volume was 6 to 1 positive on New York on total volume of a heavier 1 3/4 billion. Nasdaq traded nearly 2.6 billion and had a 3 ½ to 1 volume ratio.
So, volume is increasing as they move up to what may be a near-term top.
TheTechTrader.com board was mixed and narrowly so, except for a few issues. The Direxion Financial Bull 3x Shares (FAS) soared today, up 7.49 to 88.04. Goldman Sachs (GS) gained 3.21 to 179.87, General Electric (GE) 1.17 on 261 million, JP Morgan (JPM) 1.46 to 44.65, and Morgan Stanley (MS) 1.41 at 30.15. Wells Fargo (WFC) also advanced 83 cents to 29.41, a new 2009 high.
So, a very strong day for the financials.
Other issues of note, DryShips (DRYS) advanced 47 cents to 7.48 on 55 ½ million shares. Canadian Solar (CSIQ) gained 82 cents to 17.35 on more than a million traded. American International Group (AIG) added 1.52 to 40.32 on 35 million. OmniVision (OVTI) had an excellent session, up 91 cents at 16.65 on 2.3 million.
Flextronics (FLEX) gained 54 cents to 7.46 on 25 million shares.
On the downside, the Direxion Financial Bear 3x Shares (FAZ) closed under 20 for the first time ever, down 2.04 to 19.98 on 94 1/2 million traded. The UltraShort Real Estate ProShares (SRS) dropped 80 cents to 9.02, just a penny off its low, an all-time low, on more than 42 million.
The Direxion Small Cap 3x Bear (TZA) lost 75 cents to 11.51 on 20 million traded, and the Direxion Large Cap Bear 3X Shares (BGZ) 1.03 to 20.77 on 10.7 million shares. China Green Agriculture (CGA) dropped back 1.12 to 12.36.
Stepping back and reviewing the hourly chart patterns, after a mixed start the indices took off in the morning, worked their way higher all session, had a late retest that was successful and closed near the highs for the day going away. So, the rally still won’t give it up.
With the indices now getting to extremely overbought conditions, we’re suspecting something may turn shortly. However, that may not occur until after options expiration on Friday.
Good trading!
Harry
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