The chart below shows that $NYA, the NYSA Composite Index is moving higher and $NYMO, the NYSE McClellan Oscillator is moving lower. This looks like a bearish developement. There was a similar bearish divergence back in May and July as you can also see on the chart.
The daily chart below shows SPY with two 50-period Bollinger Bands, one with 1 standard deviation and the other one with 2 standard deviation. SPY has been able to stay above the lower 1 standard deviation Bollinger Band and it has been strong enough to touch or move above the 2 standard deviation upper Bollinger Band during the time frame shown on the chart. In the past SPY moved lower after such an explosive move above the upper Bollinger Band.
$TRIN is the New York Stock Exchange short-term Trading Arms Index. It is a breadth indicator and is calculated from the AD ratio divided by the AD Volume ratio:
(advances / declines) / (up volume / down volume)
Low readings, below 1 show relative strength and high readings, above 1 show relative weakness. $TRIN can be used to detect overbought/oversold conditions.
The chart below shows $TRIN. Notice how it dipped below 0.5 which is considered overbought.
MFI the Money Flow Index is a momentum oscillator calculated from both volume and price. The calculation is similar to the calculation of RSI the Relative Strength Index. For this reason it is also called the volume-weighted version of RSI. Theories suggest that volume leads price and also RSI momentum oscillator leads price. Including volume in the calculation can increase this lead time.
The weekly charf below shows DIA the SPDR DJ Industrial Average ETF with MFI below the chart. Notice that DIA recently slightly moved lower but MFI failed to reach new lows. I consider this a bullish divergence. We will see the development of this divergence in the next couple of weeks.
IWM the Russel 2000 iShares is representing the small-caps. Although it holds up better than large-caps as I mentioned in previous posts it is losing momentum. Notice on the chart below that it failed to reach the upper channel before starting to trade sideways and MACD crossed below the signal line.
$NYMO, the New York Stock Exchange McClellan Oscillator is in negative territory which is bearish. $NYMO is a breadth indicator and is calculated from Net Advances on the NYSE. When $NYMO is negative declining issues are dominating. $NYMO works similar to MACD it puts momentum into the Advance-Decline Line.