I wanted to give my report on the stock market today. As is my customary routine, I like to check out the market action on the four major indexes to see the price and volume action for the day. As a reminder, I have a little routine that I do after the market closes. It takes a couple of hours to get all my data but here is what I do.
The first thing that I do is go to investors.com and check out the four major indexes. Those are the S&P 500, the Dow, the NYSE and the NASDAQ. This information is free by the way and you don't need to be a subscriber. The first three indexes price action for the day are all compared to the volume on the NYSE. The charts here show that without me having to look at a different chart. It's a small step but it saves a me having to remember it. The other thing is that the NYSE volume figures for the day are different than from other news outlets. Today for example volume on the NYSE according to IBD is 873 million shares but according to other outlets it was around 4 billion. This is because the 4 billion shares traded include all of the regional exchanges as well. Why the difference? Your guess is as good as mine, but I am guessing it's because this then puts greater weight on what the institutions volume is as a percentage of total volume. Otherwise, I'm not sure. But because the editors determine market direction from this figure I like to be consistent as well. FYI: NASDAQ volume for the day is pretty close to other news outlets but not exact.
The NASDAQ closed slightly higher today on lower volume. While not a distribution day, you'd rather see the index close higher on higher volume.
The market indexes were mixed today. The NASDAQ was up in lower volume and the other three indexes were lower in lower volume. This means that all four indexes dodged a distribution day today. The market remains in a confirmed uptrend with the NYSE standing with the most pressure at 3 distribution days.
It's important when you look at the market indexes to ask yourself, what happened? Determine for yourself exactly what kind of day it was. With the market in a confirmed uptrend, the question you want to ask is was it a distribution day. It wasn't which is good. What you hope to see is the market closing higher on higher volume.
Once you have figured out what you think happened, watch the IBD TV Market Wrap. This daily video is an awesome resource to help you spot what to look for. It will help confirm what you thought. If you were wrong make a note of today's action and remember that next time you see similar price and volume action, you'll know how to spot it.
I then swing over to read the Big Picture column. This column, along with the video is usually available before the actual paper. Read it to garner additional information like what the paper thinks are the current leaders in the market are. Make sure to consider them for your watch list.
According to what I heard, the market is awaiting the jobs report tomorrow and we've started entering some earnings results period as well. This could have an impact on the your stock market investing depending on what happens.
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