Attached is the updated Advance Decline Breadth Charts, including the cumulative AD line, momentum index, cumulative AD volume line, 10 Day AD oscillator and the McClellan Oscillator and Summation Index.
isatrader
Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill - Reminiscences of a Stock Operator.
As I am beginning to learn, it appears the Nasdaq Adv/Dec line (NAAD), turns earlier than the NYSE Adv/Dec line (NYAD). In 2007 the NAAD hit it's high in Feb and began to turn down but the NYAD didn't hit it's high until early June. The SPX fought on and made a new high in October and then turned down. So, the reading would be this is a potential negative for the market. How do you interpret the NAAD vs the NYAD?
(2014-08-24, 06:32 PM)JimStudent Wrote: As I am beginning to learn, it appears the Nasdaq Adv/Dec line (NAAD), turns earlier than the NYSE Adv/Dec line (NYAD). In 2007 the NAAD hit it's high in Feb and began to turn down but the NYAD didn't hit it's high until early June. The SPX fought on and made a new high in October and then turned down. So, the reading would be this is a potential negative for the market. How do you interpret the NAAD vs the NYAD?
I don't really view them independently when thinking about the market, but try to see together, as they are simply different parts of the US market. The Nasdaq has more momentum type stocks, and so you'd expect those to turn down first when the market is getting frothy, as people tend to move out of those type of stocks and into larger cap stocks that you'd be more likely to find listed on the NYSE, and hence the larger cap names tend to hold out longer when there's an actual Stage 3 occurring. But as we know, when a Stage 4 hits the market, almost everything suffers initially.
The purpose of the market breadths charts is to try and follow the "Weight of Evidence" approach that Weinstein does, and so try not to get too focused on any one breadth indicator if it breaks down, while others others are still in a normal range. But if you see multiple indicators giving warning signs at the same time, then it's time to be more defensive and take a look at your individual holdings more closely.
isatrader
Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill - Reminiscences of a Stock Operator.
