As someone who came into the securities business when the various exchanges were run like private clubs, I always wondered if they could successfully transition themselves to publicly held companies. Some of the decisions made in the late 1970s by closed-door committees with vested interests and conflicts would not happen today. Enough about history, how do the charts look?
The Intercontinental Exchange (ICE) chart above is neutral at best. Prices have traded sideways between $220 and $245 for months with a largely neutral On-Balance Volume line (OBV), but in the last month, the OBV line has been declining. Four weeks of volume heavier on down days could be a temporary phenomenon, but it could also suggest caution for the near-term price performance of ICE.
The CME Group (CME) chart above has also been trapped in a neutral or sideways trading range between the upper $80s and $100. For about six weeks now, the OBV has been inching lower with a two-month downtrend (lower highs and lower lows) visible on the chart. A break below the April lows would be needed to precipitate further weakness.
The Nasdaq (NDAQ) chart above shows the third example of a sideways range -- a theme perhaps? Here, the NDAQ is stuck between $48 and $54, and in the last two months we have edged a little higher while the OBV line has weakened. With prices bumping up near their recent highs with volume heavier on down days, we have a disconnect. Traders should be buying more shares on up days to confirm the short-term trend. The end result of this disconnect could be a false breakout to the upside. Prices make a new high but fail to carry through because the advance was not supported by rising volume.
Like the overall market, shares of these exchanges will eventually break out and start a new trend. We'll keep you updated.