[isatrader]

The NYSE and Nasdaq Bullish Percent Indexes both moved back to Bear Confirmed Status today. And the NYSE 200, 150 and 50 day Moving average breadth charts also moved back to the negative column, and continue to linger in the lower quarter of the charts.

The NYSE & Nasdaq Bullish Percent Indexes

       

NYSE Percentage of Stocks above their 200 Day, 150 Day and 50 Day Moving Averages P&F charts

           

[isatrader]

Attached is the NYSE Cumulative Advance Decline chart and the US New Highs - New Lows Chart

[GlobalCitizen]

Hello everybody,

I have a quick question.

On page 13 in his book, Stan writes that the 10-week MA is best for traders to use. On the next page however, he writes that no stock should be shorted when its above its rising 30-week MA. Does this mean that for a trader, this should be above its rising 10-week MA? And no stock is a buy when it's below it's 10-week MA?

[isatrader]

Hello everybody,

I have a quick question.

On page 13 in his book, Stan writes that the 10-week MA is best for traders to use. On the next page however, he writes that no stock should be shorted when its above its rising 30-week MA. Does this mean that for a trader, this should be above its rising 10-week MA? And no stock is a buy when it's below it's 10-week MA?

I think you're getting yourself mixed up there with the MA's, as that doesn't mean that no stock is a buy when it's below it's 10-week MA, as it's referring to the 30 week MA and not the 10 week MA.

Basically when using the trader method and looking to go long the stock should ideally be above it's 10 week MA and also above a rising 30 week MA. And if looking to short then the stock should ideally be below it's 10 week MA and also below a declining 30 week MA.

So:
never go long a stock that's below a declining 30 week MA
and
never short a stock that's below a rising 30 week MA

Those simple guidelines will keep you out of a lot of bad trades.

For a more indepth roundup of what the method looks for see the Stage Analysis Breakout Quality Checklist thread.

[GlobalCitizen]

Ok tnx for clarifying! Shorting seems to be the way to go right now.

[pcabc]

My market breadth plots:
           
       

[isatrader]

The NYSE Percentage of Stocks above their 150 Day Moving Averages P&F chart has had a double top breakout today and so moves to Bull Confirmed status for the first time since the April top for the 150 Day breadth.

However, has occured below the key 30% level, and so is a tentative signal until it gets above the 30% level. But it is in a good field position and the 200 day is also close to a potential breakout. So I will be watching the breadth this week with interest and looking at the other breadth measures to see where the weight of evidence is. But I remain cautious still, as for example in 2011 there was an early breakout in the breadth below the 30% level that took another few months to get back above the 30% level and give the buy signal. I see it as the first positive development, but the weight of evidence will need improve in other areas as well like the advance decline and new high new lows.

So I'd say the improvements in the Percentage of Stocks above their moving averages would change the overall breadth status to Neutral imo.

   

[isatrader]

Attached is the updated US equity index charts.

US Stock Indexes