Volume today: SPY and volume

For some reason the index data only has daily volume compared to stocks that have 1 minute volume.  I am using an ETF that tracks the S&P 500 called SPY.

I was interested in seeing how the volume was today.  Strong selling in the morning with mostly selling second half of the day with the exception of the last 5 minutes.  This strong sell volume seemed to have a mandate to close today in the green. Well played bulls.

Below is the S&P 500.

Yesterday we had a Bearish Gravestone Doji
Today we have a Bearish Dragon Fly Doji

MACD: The histogram had a larger negative tick today, meaning that the distance between the MACD line and Signal line are diverging.  This signals a momentum shift towards the bear side.

Slow Stoch: As expected once the 80 level was broken the Slow Stoch has had a hard time getting back over it.  This means that the market is currently overbought.

All signals point to a breakdown however with more POMO, occurring Thursday then Mon/Wed/Fri next week, this market could continue to drift up to sideways.  What is really on peoples minds is Nov 2-3 FOMC meeting where QE2 announcement is likely to communicated.  The market has priced in alot of QE2 already so the FED would have to have a massive injection or miss market expectation with the intent to allow the market to correct, before announcing additional QE measures.  The language will be important when the meeting announcement comes out.

Also Mid-term elections are on November 2nd as well.

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Update: Vix

So... VIX runs opposite to the overall markets.  Up in the VIX should result in a down in the stock markets.  In two days, the VIX is almost up 8% as the S&P 500 have stayed basically flat.  With this change in the Vix, all indicators and volume confirming bearish behaviour, I will reaffirm my previous call yesterday that I believe monday was our turn date and the high will not be taken out. There is always a but.... the GDP numbers coming this friday and QE2 / Elections next week it seems that anything could happen.  These are massive events that could shape the next few months of economic activity.

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Update 2:  Dollar index

On the 19th I mentioned that the spike in the dollar index was a result of China's unexpected rate hike.  Today we have seen a similar spike, with no real news story backing it.  The fact that the 19th broke the trend line and today we have retested and broke above it again indicates that a potential bottom in the dollar index has been reached.  The Dollar has moved in the opposite direction to the overall markets as seen here.

A bottom in UUP would be bearish for the markets, but the FED QE2 talk has been hammering the Dollar over the past 2 months.