StockCharts Blogs - Don't Ignore This Chart!

Lumber and Homebuilder ETF Continues their Uptrends

The Lumber Continuous Futures ($LUMBER) remains in a clear uptrend with a series of higher highs and higher lows since late June. This advance (roughly) corresponds with an advance in the Home Construction iShares (ITB). ITB was a little shakey in October-November, but the etf has been moving higher since late August. Rising lumber prices suggest rising demand which should bode well for housing starts.


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New Highs Still Outpacing New Lows

From the pre-defined scans page, the number of new 52-week highs continues to outpace the number of new 52-week lows. This is true for the Nasdaq, NYSE, Amex, TSE and CDNX. The latter two are Canadian exchanges. New highs are a show of strength, not weakness.



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Intermarket Perfchart Reflects Risk-on Trade

The risk-on trade remains alive and well in October. As the Perfchart below shows, stocks, oil and gold are strong, while bonds and the Dollar are weak. The relationships reflect a market that is embracing risk. Strength in the Dollar and bonds would start to suggest otherwise.


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Intraday Up/Down Volume Sentiment Chart

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"Wow.  That doesn't look like any financial chart I've ever seen before."

I agree, that is one strange looking chart.  What the green area shows is the total amount of "Up" volume - i.e. the total volume of all stock that are currently higher than their previous close - the "Advancers' volume."  Similarly, the red area shows the "Decliners' volume."  Both numbers reset to zero at the start of each day which is why they usually make the kind of triangular shape you see above.

By plotting $NAUPV in "area" mode and underlaying $NADNV on the same chart, we can see at a glance whether today is an "up" day or a "down" day at a glance.

(Note: There is a subtle danger however - $NAUPV and $NADNV are plotted on different scales.  See how the red and blue Horizontal Lines at 900 don't match because of the scale differences?  In general, that's not a big deal, but it could be a problem if you are comparing the magnitudes of the red and green areas directly.)