I have uploaded a lot of charts and I am not sure I will get to all of them. First the daily SPY, today we made a new high for the move, still with a relatively narrow range and although volume rose, it was not up to the standard of earlier in the move. The close, at the high end of its range, I do not believe was in new high ground and it certainly was not in the futures(not shown.) This low volume rally can only resolve itself with volume, one way or the other. The lower volume is further confirmed in the BGU. Also look at the volume in the spx and remember that a bit more than 1 billion shares was the trading in 2 probably bankrupt banks.Today I thought we might look at the charts of the two largest sectors in the spx for a clue about where it is going. Please first look at the xlf- financial index. The line drawn in is the spx close for comparison. The first week of april the financials are weaker than the index not making a new high with the spx and volume has dropped off even more radically. Last Friday we gap up on high volume, stronger than the market and on Tuesday the sell off has even greater volume than Friday's gap up advance. The market however stays above its previous trading range unlike the spx, showing strength. The rally two days ago is on weak volume and today the narrow range and lower volume quite possibly forms a secondary test. Giving credence to this possibility, the xlf has again fallen out of step with the whole market index we have chosen, the spx.
Goldman, GS has been one of the market leaders, as can easily be seen by comparing the charts. It penetrated its January high early in February unlike the market which still has not done so and it never made a new low in March, instead emphasizing its uptrend by making a higher low.
It too is now weaker than the market after a very high volume sell-off and possibly making a secondary test.
JPM announced earnings today and with a narrow range and high volume failed to make a new high.
Clearly the financial sector might be losing its leadership mantle and might even be in trouble.
The XLE is in even worse shape, failing to respond to strength in the spx for the past month. Volume has dried up, its range has narrowed and it has moved out to some kind of apex.
The next big volume wide range move takes all the marbles.
Before jumping to bearish conclusions, please look at the hourly pnf 1x1 and notice that the uptrend is still intact and without a good down move soon there is the strong likelihood that all of this weakness we have commented on is absorption of overhanging supply.
