Volume Tell in SPY
This post is for informational purposes only. Not trading or investing advice.
We published Data Signaling Pause for TWTR fourteen trading days ago. The stock maintained a negative bias until Friday's higher-volume breakout. Leading the move, TWTR produced statistical signs of accumulation as it pulled into and held the Bollinger middle band. Could Friday's 10-period "Z Close" score of 2.06 be the confirming buy signal for higher prices?
Scroll through the two images below to see the data-level technicals and analytics.
Image 1 (available in Core and Stage) shows a capitulation day on 6/25 followed by modestly rising price, volume and volatility indicators as well as improvement in momentum. The MACD is threatening a zero line cross.
Image 2 (available in Stage only) shows bullishness in the moving averages, a complacent MACD that's building momentum and the following statistical gap: Acc/Dist and OBV outperformed price and momentum metrics since the market lost steam in mid June. Will this volume tell foreshadow the market's next short-term (e.g. 1-2 weeks) move?
In the image below, let's look at SPY vs its benchmarks and next-period (Tuesday) technicals.
SPY, QQQ and EEM are all producing bullish technical events. Even if the 500 Index trades flat Monday, it would still show upward momentum on Tuesday.
Considering what we've learned so far, the analytical texture is bullish, but trade knowing earnings season is looming, volatility is percolating and political and rate risks persist.
In the next image, adding evidence to the above bias, we see many tickers are threatening bullish divergence (by event 20, "Bullish Histogram approaches zero").
Where's the strength specifically?
Toggling between the image above and image one below (Sort tab, daily data, highest to lowest Closing price Z score), the healthcare sector including AMGN, ABBV and CELG leap from the screen. Given the relative technical and statistical data, I like one stock specifically into earnings.