[isatrader]

Here's the overview charts of the US Bullish Percent and Moving Average Breadth.

Note: I've marked up the charts with my interpretation of the current Stages. The Nasdaq Composite had a strong turn around this week, after falling back into it's Stage 3 range last week, and closed the week just back in Stage 2 territory. Small caps put in a new closing high and so remain in Stage 2, but the other indexes all remain within their Stage 3 ranges, but closed above their 30 week MAs. The S&P 500 also looked more constructive, and is now in a good positon to attempt a Stage 2 continuation breakout after rebounding strongly off of it's 30 week MA.

                   

[BarnabeBear]

Thanks guys! Early delivery this weekend!

[malaguti]

Here's the overview charts of the US Bullish Percent and Moving Average Breadth.

Note: I've marked up the charts with my interpretation of the current Stages. The Nasdaq Composite had a strong turn around this week, after falling back into it's Stage 3 range last week, and closed the week just back in Stage 2 territory. Small caps put in a new closing high and so remain in Stage 2, but the other indexes all remain within their Stage 3 ranges, but closed above their 30 week MAs. The S&P 500 also looked more constructive, and is now in a good positon to attempt a Stage 2 continuation breakout after rebounding strongly off of it's 30 week MA.

Interesting analysis for stage 3 on SPY
30sma is rising. no lows taken out and rising higher lows, just no higher highs

[isatrader]

Interesting analysis for stage 3 on SPY
30sma is rising. no lows taken out and rising higher lows, just no higher highs

The price action on the index chart is only one part of the story for analysing the Stage. The breadth data such as the Bullish Percent and moving average breadth that you can see below the chart gives much more context for anlaysing the Stages and are leading indicators, whereas the index itself is a lagging indicator due it being an average of the stocks. So I give the market breadth data much more weight for analysing the Stages of the indexes as you have make decisions at the right edge of the chart, and not in hindsight.

For me the initial move into Stage 3A in the S&P 500 began in the February breakdown, and was then confirmed by the lower higher put in in March which then price action made a lower weekly close than the February weekly close, and closed below the 30 week MA, which also turned down briefly, and then flattened out, and is now turning up again. However, the price has yet to close back above that March lower high, and has tested the lows and highs of the range once already. So for me it's a clear Stage 3 range, but people are free to disagree, it's only my interpretation of the data.

However, I do think that there's a common misconception around Stage 3 due it's definition in the book as the top area. I think that is true in a lot of cases, however, it would better if it was simply defined as a significant period of distribution, as often it's only a prelonged, but sometimes volatile consolidation phase following a Stage 2 advance that then continues higher back into Stage 2 again.

[malaguti]

Interesting analysis for stage 3 on SPY
30sma is rising. no lows taken out and rising higher lows, just no higher highs

The price action on the index chart is only one part of the story for analysing the Stage. The breadth data such as the Bullish Percent and moving average breadth that you can see below the chart gives much more context for anlaysing the Stages and are leading indicators, whereas the index itself is a lagging indicator due it being an average of the stocks. So I give the market breadth data much more weight for analysing the Stages of the indexes as you have make decisions at the right edge of the chart, and not in hindsight.

For me the initial move into Stage 3A in the S&P 500 began in the February breakdown, and was then confirmed by the lower higher put in in March which then price action made a lower weekly close than the February weekly close, and closed below the 30 week MA, which also turned down briefly, and then flattened out, and is now turning up again. However, the price has yet to close back above that March lower high, and has tested the lows and highs of the range once already. So for me it's a clear Stage 3 range, but people are free to disagree, it's only my interpretation of the data.

However, I do think that there's a common misconception around Stage 3 due it's definition in the book as the top area. I think that is true in a lot of cases, however, it would better if it was simply defined as a significant period of distribution, as often it's only a prelonged, but sometimes volatile consolidation phase following a Stage 2 advance that then continues higher back into Stage 2 again.

Interesting, thanks for the reply. 
I guess I liken it to the action on the small caps $SML where the breadth data may have been signalling trouble, yet the chart itself was forming a triple top breakout and is now powering ahead once more. not suggesting the s&P will do the same, or even not, only time can tell, but the "period of consolidation" is indeed there for all to see
presumably you wouldnt have called $SML as 3
not trying to be facetious, just getting back into stage analysis and interesting to be able to get this debate after so long!

I'm attaching an old chart of MMM back in 2005 where Stan has published his global trend alert where this was ranked as a stage 2B 
I'll be interested to pull up some of his others. anyway as you say, it is a subjective matter

[isatrader]

Interesting, thanks for the reply. 
I guess I liken it to the action on the small caps $SML where the breadth data may have been signalling trouble, yet the chart itself was forming a triple top breakout and is now powering ahead once more. not suggesting the s&P will do the same, or even not, only time can tell, but the "period of consolidation" is indeed there for all to see
presumably you wouldnt have called $SML as 3
not trying to be facetious, just getting back into stage analysis and interesting to be able to get this debate after so long!

For me the small caps did enter into a Stage 3A period, which means "Looks as if a top is starting to form. Be sure to protect holdings with a close stop", as the weekly made a close below the 30 week MA, which I use as the first point to consider that a Stage change might be happening, and then failed to recover the pullback fully, and made a lower high in March. That's my confirmation point of the Stage change into early Stage 3A, as if a stock can't make a quick continuation after a pullback like that to the 30 week MA, then it becomes a stock that may potentially be moving into Stage 3. So I give it the Stage 3A rating, as it's usually still too early to tell still until there are more points of confirmation for a full Stage change. It then made a higher low around the slightly still rising 30 week MA, and then tested the top again, so looked to be making a volatility contraction pattern, which is a pattern that often resolves higher. So it had three months where it moved into early Stage 3A imo, but then made a continuation breakout, to return back to Stage 2 again.

I'm attaching an old chart of MMM back in 2005 where Stan has published his global trend alert where this was ranked as a stage 2B
I'll be interested to pull up some of his others. anyway as you say, it is a subjective matter

If that's a weekly chart with a 30 week simple moving average, then personally I'd class it as a Stage 3, as it had been swinging above and below the 30 week MA, which had turned down and had flattened out. Stage 2B means "Getting late in uptrend", which you could definitely describe that chart as, but I think the lower high and lower low, and then the move back above that lower high again but still well within the recent range would have made me put it into a Stage 3 classification personally from just that data. But I guess it could have been because of the recent near term higher high as to why it got a 2B rating, and not a 3, as it looked to be improving again.

However, what that chart doesn't show is the Mansfield RS indicator or the volume, which are both useful for determining the Stage fully on a stock, as well as the sector performance versus the market etc. So there may have been other reasons outside of just the price action as to why it was classed as a 2B and not a 3.

[malaguti]

Interesting, thanks for the reply. 
I guess I liken it to the action on the small caps $SML where the breadth data may have been signalling trouble, yet the chart itself was forming a triple top breakout and is now powering ahead once more. not suggesting the s&P will do the same, or even not, only time can tell, but the "period of consolidation" is indeed there for all to see
presumably you wouldnt have called $SML as 3
not trying to be facetious, just getting back into stage analysis and interesting to be able to get this debate after so long!

For me the small caps did enter into a Stage 3A period, which means "Looks as if a top is starting to form. Be sure to protect holdings with a close stop", as the weekly made a close below the 30 week MA, which I use as the first point to consider that a Stage change might be happening, and then failed to recover the pullback fully, and made a lower high in March. That's my confirmation point of the Stage change into early Stage 3A, as if a stock can't make a quick continuation after a pullback like that to the 30 week MA, then it becomes a stock that may potentially be moving into Stage 3. So I give it the Stage 3A rating, as it's usually still too early to tell still until there are more points of confirmation for a full Stage change. It then made a higher low around the slightly still rising 30 week MA, and then tested the top again, so looked to be making a volatility contraction pattern, which is a pattern that often resolves higher. So it had three months where it moved into early Stage 3A imo, but then made a continuation breakout, to return back to Stage 2 again.

I'm attaching an old chart of MMM back in 2005 where Stan has published his global trend alert where this was ranked as a stage 2B
I'll be interested to pull up some of his others. anyway as you say, it is a subjective matter

If that's a weekly chart with a 30 week simple moving average, then personally I'd class it as a Stage 3, as it had been swinging above and below the 30 week MA, which had turned down and had flattened out. Stage 2B means "Getting late in uptrend", which you could definitely describe that chart as, but I think the lower high and lower low, and then the move back above that lower high again but still well within the recent range would have made me put it into a Stage 3 classification personally from just that data. But I guess it could have been because of the recent near term higher high as to why it got a 2B rating, and not a 3, as it looked to be improving again.

However, what that chart doesn't show is the Mansfield RS indicator or the volume, which are both useful for determining the Stage fully on a stock, as well as the sector performance versus the market etc. So there may have been other reasons outside of just the price action as to why it was classed as a 2B and not a 3.

always good to get your views ISA

[kero]

Yes, what we could see as a stage 3 formation isn't necessarily a top market formation, which is actually true for whole market as for simple stocks.

Also, it appears that in any case, the only way to distinguish between "continuation" stages 3 and "toppish" stages 3 is by considering participation indicators like the ADline. In the past, all major bear markets were preceded by evident divergences between the ADline and the main DJIA indice. To say it otherwise, the ADline and other Weinstein indicators tell us if the market is or is not ready to go massively down, and the stage analysis only tell us when the bear market will start in a such context.

All of that was better understood by me thank to the work of BillyRayValentine from andlil's French forum.

Right at the moment we have not such divergences, that's why for the moment I stay fully invested.