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Right now, I would not try to guess whether this decline could be strong. For this, I would recommend monitoring 60-min index charts (1 bar = 1 hour). So far, the money flow on that chart is positive which suggests that the trend on this frame is still positive and that even if we see a decline, the indexes still have prover to come back to their highs.
Another important on my opinion point is the strong bullish volume we had yesterday on all indexes. This volume surge may lead to the shift in the supply/demand and at least to halt the current advance.
P.S. You may check money flow for S&P 500, DJI, Nasdaq 100, Russell 200 and other indexes on the MarketVolume's charts (MV Charts)
2 comments:
Thnx for Your post.
I will try to monitor money flow (MFI14) on 60min chart. Is it negative when below 50 or when it is "trending" down wards?
There are several indicators that could be used to track Money Flow: Money Flow Index, Chaikin Money Flow, SBV Oscillator, etc.
As a rule when an indicator moves down it means decrease in buying pressure and increase in selling pressure. Personally, I rely more on an indicator's direction. How far up or how far down it moved I usually associate with how strongly security could be overbought/oversold.
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