The Shift in Volume and in Europe

Well it appears there is some positive news coming out of Europe this morning with European leaders shifting the rules of the game to make it easier for countries and banks to get better access to rescue funds. The Euro is loving this, up around the 1.262 area against the dollar as I write this. 

When heading to the charts, something that has stuck out to me during the recent market weakness has been the buying (green line) and selling (red line) volume that I’ve discussed a few different times in the past few months. While the S&P has been dropping, buying volume has actually been rising. I think volume is extremely important when taking a view of the markets and can’t be ignored. There have only been a handful of times where this type of divergence is not corrected in favor of volume, but like anything it’s not perfect. 

Futures are up this morning, with the e-mini S&P trading around 1340-1345. A lot can happen during trading today muchness trading over the next few days but it appears buyers might regain control without any other major variable changing. 

UPDATE: Equities are rallying hard today which has pushed the McClellan Osc. up near an oversold level. There is still plenty of trading left for today but this is something to keep an eye on. We last saw an oversold McClellan on June 19th .

Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the blog. Please see my Disclosure page for full disclaimer.

Nat Gas Overextended?

JC over at All Star Charts has done a great job at documenting the larger moves in natural gas and mentioned it yesterday as a guest on Bloomberg radio. Recently nat gas has been on a tear, up almost 50% from its mid-April low. But where it stands as of yesterday’s close, it appears it could be overextended.  

The commodity is now approaching its 200-MA as well as a falling trend line of resistance from its June ’11 peak. I’m also seeing a negative divergence in the RSI as well as the money flow indicator (which is a volume-weighted relative strength indicator). Also, according to The Stock Traders Almanac, based on seasonality, natural gas tends to top out in June. With all of these headwinds, it’s possible we see some (at least) temporary weakness in nat gas prices. But just like on the downside, it very well could become even more overbought, so it’s important to not try to jump in front of this moving train until it fits into your personal trading risk/reward paradigm.  

Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the blog. Please see my Disclosure page for full disclaimer. Connect with Andrew on Google+.