More buyers must turn out to support a second rally leg higher

I'm posting up some additional charts this evening to illustrate a few points about a few sectors, and then show how a range of equity market indices are faring with respect to their moving averages and volume support. The three sectors I'm showing here are the semiconductors, retail, and banks. Interestingly, retail is one of the heaviest looking sectors, as it already fell under the 50 day moving average and is threatening to move under its May lows - which would also place it under its 200-day moving average (which it actually had moved above). The semiconductors (shown at right with SMH) are a little better off, also above their 200-day moving average and only poked the 50-day moving average intraday. In both, however, the buying volumes really dropped off, and have moved under their 30-day moving average (the red line in the "OBV" indicator window). Using the 30-day moving average with the On Balance Volume (OBV) helps us see how relatively bullish or bearish the volumes are, and is a useful adjunct to other indicators.


Just looking at the raw volume bars, you can see that there's been more selling in the retail sector (RTH). This is not an encouraging sign for the rest of the economy.

The same charts constructed for the banking sector tell a generally concerning tale, as I've been showing. This time I'm showing the ETF's for both a primary bank index (KBE) as well as for the regional banks (IAT). The regional banks are definitely in weaker position, having dipped relatively lower on the move down since early May. Those two charts are below.

I've also included smaller versions of charts with the same indicators, across a variety of the equity market indices. In some cases they are trying to stay above their 200-day moving averages, in others they remain below. The OBV indicators for some look relatively stronger or weaker than in others. Many are showing negative divergence, such as with the MACD and CCI indicators. Looking across the charts, it's evident that buyers will have to show up in force in order to support the idea that we're just seeing a moderate pullback that will lay the groundwork for another rally leg up. Meaning - we need to remain alert to the possibility that the March lows will be retested.