Today on the Marketbeat: The Itsy-Bitsy Spyder gets washed out....agian

Market #'s @ Closing:

DOW: -735 to 8,577

S&P: -79 to 918 

NASDAQ: -128 to 1,650

RUS2K: -42 to 512

TSX/S&P: - 616 to 9,339

VIX: +13.56 to 68.69

Internals:

Core Sector List:  16/0 to the Bears

NYSE

Breadth: 50/1 Neg

Trin: 4.08

A/D Line: -2512

NASDAQ

Breadth: 40/1 Neg

Trin: 6.74

A/D Line: -1262

Another day, yet another drop down to lows. Today's price action is perfect for anyone owning puts or is short the market. We saw the market gap down and leave that gap unfilled, with the bears growling the whole way down. An interesting point of interest is that with a Fibonacci retirement on the SPY 10-day, hourly chart from the recent highs and the lows, today's action brought us right below the 61% fibo line. This could speak volumes for tomorrows price action. We could be in for a little short covering then a big slide down. 

See SPY 10Day Chart (Click to enlarge)

Under the hood we saw internals act very accordingly to the price action, wit the breadth closing at the highs for the day, around 40 and 50 to one negative, which is huge. The A/D lines have shown negative strength alongside the TICK spending most of the day below the 0 mark. All these signs point to more negative action, so if we see a pop tomorrow, be cautious and remember sell into strength in a bear market. 

Starting From Scratch:

Today I'd like to discuss the internals a bit. If your a intraday trader, internals are probably some of the most important things to watch, other than price action and volume. In fact thats what the internals measure, price action and volume. Having tools that show the trader what is going on behind the scenes can give an experienced trader a heads up on potential swings. 

The internals I use on a daily base are chartable on the TOS (Think or Swim - Click here to go to their site). Im pretty sure they are plotable on other services. 

Ive attached a Thumbnail of my internal setup, Click the thumbnail to enlarge and see in detail

These are how they are plotted on TOS charts

1) I set up my grid charts for 3 x 2 (3 across, 2 down) giving me 6 box charts to work with. 

2) The first two boxes I place /YM (Mini Down Future) and /ES (E-mini S&P Future)

3) The rest of the boxes are as follows on my chart - next to the ES is the TICK ($TICK for charts). The Tick measures the Up/Down ratio of stocks on the NYSE exchange. one thing you might want to do is add price channel lines @ +/- 600/800/1000, when you see a 5min tick close at either +/- 1000 you can expect to see a turn around soon, depending on the bias of the day. 

4) The bottom row consists of the NYSE Breadth ($UVOL compared against $DVOL) which measures the sentiment of the volume, is there more negative volume than positive? this tool tells you.

5) The Trin ($TRIN) takes up the bottom middle box. This tool usually acts as a counter trend basis. When the market moves up it should be moving down. What to watch in this is not the levels, but the trends

6) Lastly I have the Advance decline graph. This measures the advancing issues compared to the Declining issues on the NYSE. This is the tool you might hear the Shadow trader call A/D Line. Again its used in the same manner as the Breadth, watching for convergences and levels. 

I hope this helps anyone who needs to add a lil under the hood action to their trading. If you have any questions don't be shy I can help you as much as I know. hit me up at Daizonend@gmail.com