Peter Worden's Blog

Here are three separate charts of SPY constructed on three different intraday time frames -- an hourly chart, a 2-hour chart and a 4-hour chart. If you’re viewing an hourly chart, this simply means each vertical price bar represents one hour of trading. 

Each chart has a price moving average of 20, 50 and 200 (all simple moving averages) in the price pane. Our Time Segmented Volume (TSV) indicator (along with a moving average) is plotted in the center pane and a Worden’s Stochastic in the bottom pane. My indicator parameters are exactly the same on all three charts, but are obviously dependent upon the individual time frame. For example, the price moving average with a period of 50 (cyan line running through price) is a 50-hour moving average on the hourly chart, but becomes a 100-hour moving average on the 2-hour chart and a 200-hour moving average on the 4-hour chart.

Hourly chart observations: Perhaps the most obvious observation is the recent violation of the 200-hour price moving average (white line) and SPY’s apparent failure to move back above it. This price action comes in conjunction with a deteriorating TSV. TSV is below the zero-line, its moving average is below the zero-line and in recent days TSV itself has failed on two or three tries to move back above its own moving average. The Worden Stochastic is pinned down in deeply oversold territory, which suggests to me extreme price weakness.

2-hour chart observations: This pullback in price has run deeper than what we’ve seen over the past two or three months. A test of the 400-hour moving average now appears likely, which is something we haven’t seen since March. Both TSV and its moving average are below the zero-line and moving down. The Stochastic has just begun to dip below the oversold line. It suggests weakness and I believe is likely to sink lower with price.

4-hour chart observations: Price has moved down through its 200-hour moving average, albeit by a small margin, for the first time since the positive crossover in mid-March. TSV has lost some of its strength this month when compared to March, April and May. TSV has moved slightly below the zero-line just as it did last month, but when this occurred last month price managed to successfully hold at the 200-hour moving average. To further elaborate using a comparison of these same two points in time, note that our Stochastic has slipped lower and is now at a level not seen since the rally began in March. Yes, we need to see some additional follow-through in selling pressure, but I don’t think it is unreasonable for this pullback to reach a target in the area of the 800-hour moving average (white line).
 

I see a short-term negative character change taking place in both AAPL and GOOG. In the case of AAPL, I have made several comments to this effect in TeleChart Platinum chat over the past few days. This change of character appears most clearly on the hourly charts.

These two hourly charts of GOOG and AAPL have a 20-hour, a 50-hour and a 200-hour simple moving average running through price. Although I have chosen not to display my volume-weighted MACD indicator in its own pane, I have color-coded my price bars to reflect whether the indicator is bullish (green price bars) or bearish (red price bars). The center pane contains a 30-hour (front weighted) Time Segmented Volume (TSV) with a 25-hour moving average. In the bottom pane I have a Worden’s Stochastic displayed on a 60-hour period with some smoothing.

Both GOOG and AAPL display very similar patterns on an hourly chart. This is not only the case with price, but with TSV and the Stochastic, as well. Price moved down through the 20-hour moving average several days ago and the 50-hour was violated yesterday. Today’s attempt to get back up through the 50-hour moving average was unsuccessful. Note the persistent red (hourly) price bars over the past week signifying a negative reading on my MACD indicator.

Time Segmented Volume in the case of both GOOG and AAPL crossed down through the zero-line yesterday. TSV remains both below the zero-line and its moving average. Finally, the Worden’s Stochastic turned down from overbought territory at the beginning of this week and

has continued to drift lower.

The upside momentum appears to be lost with both AAPL and GOOG and it would not be unreasonable to expect both stocks to pull back from here to their respective 200-hour moving averages.    

I highlighted short-sale, NTRS in TeleChart (Gold and Platinum) with my Worden Note of April 28 in which I wrote, “Heavy selling pressure appears to be taking hold in NTRS and I believe the stock presents an excellent short-sale opportunity at current levels.”

NTRS recovered from its November lows to make it briefly back above its 200-day moving in March and April. The stock, however, has continued to deteriorate and is now likely on the cusp of entering into a significant leg down from here.

My Volume-weighted MACD has been negative for several weeks and therefore the price bars are color-coded red.

TSV remains below its moving average and both indicator lines remain convincingly below the zero-line. Just as the MACD has stayed negative, this TSV selling pressure has persisted over the same period of time.

Finally, my Worden Stochastic in the bottom indicator pane moved sharply down from overbought to oversold, where it has remained for weeks.

The behavior of all of these indicators, including price itself is similar to what we saw in September of last year.

I see possible temporary support on a test of the early March low, but I anticipate NTRS will ultimately decline into the mid to low 30s to test the November low.

This 2-hour chart spans back to the beginning of February and has 20- and 50-bar moving averages running through price. The bottom pane contains my volume-weighted MACD. As in previous charting examples, the price bars are painted red when MACD is negative and green when the indicator is positive.

    
The bounce in XLK from the early March lows reflects the recent strength in the technology sector. However, this particular ETF now appears to be stumbling on the short-term, intraday charts. Most of yesterday’s downside gap has been filled and XLK has encountered resistance today at the 20-bar moving average on this chart. As long as the yellow line remains below the blue line in my MACD indicator, price should work lower.

This second chart (also a 2-hour chart) displays our Time Segmented Volume (TSV) indicator in the center pane and a Worden Stochastic at the bottom. Admittedly, TSV remains positive having survived a test of the zero-line yesterday. However, over the past week the indicator has failed on a couple of attempts to move back up through its moving average. I think the real telltale sign here will be what gives first, the zero-line to the downside or the TSV moving average to the upside? Worden Stochastic has revealed a loss of momentum, as the indicator has moved down out of overbought territory and has now crossed down through the 50 level.