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Institutional Selling Warns of Stock Market Weakness

Stock-Markets / US Stock Markets May 13, 2008 - 05:08 PM GMT

By: Marty_Chenard

Stock-Markets

Best Financial Markets Analysis ArticleWhich index will be right ... the Dow Jones Industrials or the Institutional index with their "core holdings"?

Chart 1 is a 2003-2008 graph of the Dow Jones Industrial Average.  Note how it has had a 5 year up channel.  The channel broke to the downside ... but then the DOW moved back into the channel. 


More than that, it also just broke above a resistance line while inside the channel.  This suggests that the DOW is okay again and will now trend up higher.  See the next chart ...

This is the same 2003-2008 period, EXCEPT this chart shows the action of the "core holdings" owned by Institutional investors.

Like the DOW, it had a 5 year rising channel ... and broke through it to the downside.  That is where the similarity ends.

Note that like the DOW, the Institutional Index did rise after falling below its lower channel's support.

However ... a major difference exists with the Institutional chart.  The index Never did move back into the rising channel ... instead, it rose up to its lower channel's resistance and pulled back.  This failure to move back into the channel is a serious divergence from the DOW's behavior. 

Since Institutions account for over 50% of the market's volume, this is something to pay attention to.

 

By Marty Chenard
http://www.stocktiming.com/

Please Note: We do not issue Buy or Sell timing recommendations on these Free daily update pages . I hope you understand, that in fairness, our Buy/Sell recommendations and advanced market Models are only available to our paid subscribers on a password required basis. Membership information

Marty Chenard is the Author and Teacher of two Seminar Courses on "Advanced Technical Analysis Investing", Mr. Chenard has been investing for over 30 years. In 2001 when the NASDAQ dropped 24.5%, his personal investment performance for the year was a gain of 57.428%. He is an Advanced Stock Market Technical Analyst that has developed his own proprietary analytical tools.  As a result, he was out of the market two weeks before the 1987 Crash in the most recent Bear Market he faxed his Members in March 2000 telling them all to SELL.  He is an advanced technical analyst and not an investment advisor, nor a securities broker.

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