NYSE Summation Index - Notable Aspects

I am currently finding a variety of charts and market indicators to be of great interest as they depict internal stock market dynamics that are either less-than-robust or disconcerting / alarming.

One such chart, which I have previously featured, is that of the NYSE Summation Index.  I have put in the S&P500 as an overlay in green, with the NYSE Summation Index's MACD at the bottom of the chart. What I find particularly notable here is the long-term negative MACD divergence as indicated on the chart, in blue:

chart courtesy of StockCharts.com; annotations by the author

click on chart to enlarge



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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1287.87 as this post is written

Danger In The Markets? Part III

Moving on to the stock market. First, a 1-year daily chart of the S&P500. Although at first glance, the advance from the March lows doesn't appear too suspect, two aspects are notable. One can see that currently the price has dipped below the 50 day moving average (line seen in blue -the red line is the 200 day moving average) for only the second time since the rally began in March; and second, the MACD indicator along the bottom seems at best lethargic; at worst, it is a significant divergence from the advancing price:



Chart Courtesy of StockCharts.com

Next, here is a daily chart from ~ mid '07 of the NYSE Summation Index. I have put in the S&P500 as an overlay in green, with the NYSE Summation Index's MACD at the bottom of the chart. What I continue to find interesting here is the negative MACD divergence as indicated on the chart, as seen by the blue trendlines:



Chart Courtesy of StockCharts.com

Next is a 10-year daily chart of the VIX. The level of 20 (as seen by the blue horizontal line) on the VIX seems to be a good demarcation of stress. I originally made this observation on September 16, and note how the 20 level seems to have subsequently acted as support.

The VIX has been above this 20 level continuously since early September of 2008:



Chart Courtesy of StockCharts.com


Now on to Part IV...


SPX at 1045.41 as this post is written

Peril In The Markets? Part III

Moving on to the stock market... The first chart is the NYSE Summation Index. I have put in the SPX (SandP500) as an overlay in green, with the NYSE Summation Index's MACD at the bottom of the chart. What I find interesting here is the negative MACD divergence as indicated on the chart, in blue:

NYSE Summation Index














Chart Courtesy of StockCharts.com


Next, a view of the SPX daily chart. I have included the 50 and 200 day moving averages, in blue and red respectively. Also, on the bottom of the chart I have included the MACD. If one looks at this chart casually, as presented there doesn't seem to be any problems, with the possible exception of the MACD. Otherwise, it seems to be a strong, steady rally...one that seems to "fit" with the economic recovery scenario that almost all economists and other forecasters are predicting (these forecasts are extensively documented on this blog, and can be found under the "Economic Forecasts" Category listed on the right side of the home page).

However, as I will explain in the next post, upon closer examination, the SPX price action may be far more troubling than it casually appears...

SPX Daily 1-Year Chart













Chart Courtesy of StockCharts.com


Now on to Part IV...



SPX at 1042.73 as this post is written...