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Soultrader

Overall Market Health

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MrPaul brought up an interesting chart the other day in the chat room and I decided to take a closer look. The same stuff can be found at Stock Timing, but I have recreated the charts to post them here.

 

The charts below show a daily chart of the followig: S&P 500 Index, Nasdaq Composite, Dow Jones Index and the Institutional Holdings Index.

 

Let's take a look at the stronger links.

 

sp500index.jpg

 

We are still in an uptrend on the S&P 500 Index with higher lows and higher highs. Notice the current channel we are in. We could in fact pullback to test the lower channel.

 

dowjonesindex.jpg

 

The Dow is still very strong technically as well. The 12700 marker will be key to watch for support. The charts show that the S&P and Dow are still in an uptrend at the moment.

 

Let's take a look at the weaker links:

 

nasdaqcompositeindex.jpg

 

The Nasdaq Composite Index seems to be uptrend/chop. It has been trading all over the place ever since the break above 2400. Now here is the most interesting chart:

 

institutionalholdingindex.jpg

 

This chart shows that the big money are no longer adding to their positions. It has been consolidating ever since the beginning of 2007. Any break above the range and the markets should follow to the upside. But we do not know for certain which way this will go. Is the Nasdaq leading the pack and giving us a heads up signal? Or is it lagging? Should longs be worried? A couple of interesting questions that traders should keep in mind.

 

Please feel free to leave your thoughts and inputs. :)

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