[isatrader]

For the UK short watchlist from Friday's scans of the LSE and AIM markets - SPO.L, APF.L, SDR.L, NWR.L, HSP.L, FRES.L

                       

[isatrader]

Updated breadth stats for the top 300 UK stocks:

Price above 50 day MA: 170 (56.67%)
Price above 150 day MA: 160 (53.33%)
Price above 200 day MA: 170 (56.67%)

So not much movement on the medium and long term MAs since I last looked a few weeks back, but a bigger improvement on the short term which has got back above the 50% level. But all still in the mid range of the scale after being much higher earlier in the year and hence still Stage 3 territory imo on the breadth.

[pcabc]

Updated breadth stats for the top 300 UK stocks:

Price above 50 day MA: 170 (56.67%)
Price above 150 day MA: 160 (53.33%)
Price above 200 day MA: 170 (56.67%)

So not much movement on the medium and long term MAs since I last looked a few weeks back, but a bigger improvement on the short term which has got back above the 50% level. But all still in the mid range of the scale after being much higher earlier in the year and hence still Stage 3 territory imo on the breadth.

Are we on the cusp of a continuation versus start of a bear? I really am wondering what is going on. I note that a 50/50 world/uk fund that I have part of a pension in has just made a new high.

[isatrader]

Are we on the cusp of a continuation versus start of a bear? I really am wondering what is going on. I note that a 50/50 world/uk fund that I have part of a pension in has just made a new high.

Stage 4 doesn't necessarily mean that there will be a bear market as during major bull markets the Stage 4 breakdowns tend to be short, sharp, flushes which die out very quickly as bargain hunters come in. But you never know whether a breakdown into Stage 4 is just a correction or the start of a bear market and hence when it does happen Weinstein's method recommends being predominately in cash or short the market.

Currently, the UK market is in varying phases of Stage 3, as can be seen from the FTSE100, FTSE 250 and AIM All Share Indexes below:

           

As with the US, the UK market is seeing a rotation to the larger cap value stocks at the moment, with small and micro cap stocks getting hit hard as you'll have seen from the large number of Stage 3 and 4 stocks appearing in the daily watchlists. But the quality of any new breakouts has continued to be quite poor, and so that makes me cautious still on whether the breakouts in the larger caps is to be trusted or whether it's just the last part of this phase of the bull run that began in 2011, as the large cap defensive stocks are always the last to breakdown I believe.

So I'm continuing to sit on sidelines, as I have since late March, as the quality and quantity of Stage 4A breakdowns continues to outnumber the quality and quantity of Stage 2A breakouts by a long way. Although last week was the first week in a while, that the Stage 2 breakouts and continuations where showing better quality imo. So a short term improvement, which can be seen in the bounces in the small and micro cap charts above.

[isatrader]

For the UK long watchlist today - MGNS.L, BGBL.L, DIG.L

[pcabc]

Thank you for your insight.

Are we on the cusp of a continuation versus start of a bear? I really am wondering what is going on. I note that a 50/50 world/uk fund that I have part of a pension in has just made a new high.

Stage 4 doesn't necessarily mean that there will be a bear market as during major bull markets the Stage 4 breakdowns tend to be short, sharp, flushes which die out very quickly as bargain hunters come in. But you never know whether a breakdown into Stage 4 is just a correction or the start of a bear market and hence when it does happen Weinstein's method recommends being predominately in cash or short the market.

Thing with that is that you don't know which of the two it is until it has happened, so I see caution being sensible.

Currently, the UK market is in varying phases of Stage 3, as can be seen from the FTSE100, FTSE 250 and AIM All Share Indexes below:



As with the US, the UK market is seeing a rotation to the larger cap value stocks at the moment, with small and micro cap stocks getting hit hard as you'll have seen from the large number of Stage 3 and 4 stocks appearing in the daily watchlists. But the quality of any new breakouts has continued to be quite poor, and so that makes me cautious still on whether the breakouts in the larger caps is to be trusted or whether it's just the last part of this phase of the bull run that began in 2011, as the large cap defensive stocks are always the last to breakdown I believe.

It would be interesting to see a FTSE All Share or FTSE350 Advance Decline chart. I've notice the difference between the FTSE 100 and FTSE 250 charts but did not think about it too much in terms of advance decline. I suppose as the large caps have higher market capitalization then you'd think that there was still money going into the market overall. Looking at an FTSE All Share chart the most recent high is lower than the previous one, but the last low was higher than the previous low. Given it is market cap weighted then it does appear that the wider market is dropping despite the FTSE 100.

So I'm continuing to sit on sidelines, as I have since late March, as the quality and quantity of Stage 4A breakdowns continues to outnumber the quality and quantity of Stage 2A breakouts by a long way. Although last week was the first week in a while, that the Stage 2 breakouts and continuations where showing better quality imo. So a short term improvement, which can be seen in the bounces in the small and micro cap charts above.

I seem to be much less conservative than you and others here. This is somewhat revealing as I thought I was conservative by nature. Though I have sold quite a lot of things over the last couple of months I still have a number of stocks and funds that are still in stage 2, though nothing is stellar. Portfolio seems to fluctuate about an average that is still creeping higher - though the rate seems quite slow.

Though I'm leaving a significant proportion of cash I've also diversified some into bond funds and also into a European property fund, as both are in strong uptrends. In addition UK (at least) REIT's seem to be breaking out and property over the long term has lowish correlation with stocks. All fund are zero load so I won't flush away any modest gains with fees. Time will tell how good an idea this is, as the lesson learn with some of my more recent equity fund trades was not to buy too late into a stage 2, so I hope I am not repeating my error, rather fine tuning my method.

[isatrader]

It would be interesting to see a FTSE All Share or FTSE350 Advance Decline chart. I've notice the difference between the FTSE 100 and FTSE 250 charts but did not think about it too much in terms of advance decline. I suppose as the large caps have higher market capitalization then you'd think that there was still money going into the market overall. Looking at an FTSE All Share chart the most recent high is lower than the previous one, but the last low was higher than the previous low. Given it is market cap weighted then it does appear that the wider market is dropping despite the FTSE 100.

Attached is the Advance Decline charts for the FTSE that Prorealtime has. So I'm not sure if it's just the FTSE100, FTSE350, FTSE All Share etc, as it doesn't say. But I checked the Nasdaq version and it matched up with the stockcharts Advance Decline charts that I show each week, so I'm assuming it's correct.

I've set it up in the same way with the Cumulative Advance Decline Line at the top. Then the long term Momentum Index, then the short term 10 day Oscillator.

As you can see the FTSE Cumulative Advance Decline Line is breaking out to new highs after tracking sideways for the last year or so, and hence the UK breadth is showing some strength.

   

[pcabc]

As you can see the FTSE Cumulative Advance Decline Line is breaking out to new highs after tracking sideways for the last year or so, and hence the UK breadth is showing some strength.

Interesting. Market breadth is my Achillies heel. Despite these forums getting more cautious, myself failing to have any significant sucesses, except French Connection, this year and a lot of thing stopping then it felt like things were changing. My own screener database showed similar. However, I could not see it in the advance-decline lines. So, actually the advance/decline lines are showing some strength, I am reading them correctly. Perhaps the posters here and the indicators you are commenting on are a bit in advance of the advance/decline line?

Incidentally I have some links to A/D lines:
http://www.livecharts.co.uk/breadth_char...ecline.php
http://www.livecharts.co.uk/breadth_char...ecline.php
http://www.masterdata.com/Reports/Combin...36;SPX.htm

Interesting to see how this pans out.