Sunday, May 27, 2007

Notes of the SPY

I keep a notebook of trading ideas and economic/market observations. Here is what I wrote about the SPYs a few days ago. There is no order of importance to any of the ideas. It's simply a running list/stream-of-consciousness group of observations.

- broke through a month and a half trend line. However, it is still above the 20-day SMA. It is possible the trend line shifted down, but the previous trend line had more support from various price points. OBV has been in a range for all of May at around (roughly) 4.5 billion. CMF (Chaiken Money Flow)went negative, But this indicator has barely gone negative in the last 9 months. P&F (2 points/box and 2 box reversal) chart is still bullish double top breakout. There is so selling pressure on the P&F chart. However, the trend break on the candle chart may be a precursor to the P&F break.

The SPYs increased from (roughly) 137 to 153 afte the China sell-off -- an 11.67% increase. In May the 5 day moving average of volume increased a bit and there have been four big down volume days, although prices have only dropped big on 2 of those days.

The NY advance/decline line was stagnant for most of May, although the new high/new low line continues up.

For those of you who watch the markets, I would strongly suggest doing the same. It really helps to keep your mind focused. Also -- and I have no idea why this is -- writing things down helps me remember things. I got this idea (keeping a notebook) after reading The Money Masters series. This is a book of interviews with various money managers. At the end of the book the author makes some observations about what all the traders have in common. The first thing he mentions is they all keep a notebook.