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RE: Market Breadth Extra - isatrader - 2015-01-11

(2015-01-11, 12:03 PM)Tryst Wrote: Does anyone know what type of scenario could be causing this divergence between the Nasdaq AD in stocks making new swing lows downwards whilst the volume AD is continually rising?

Is it that there are less equities on the Nasdaq participating in the bull market while most of the volume is being down on the bluechips of the Nasdaq which are rising?

I think you nailed it. Large caps have much more volume than the small caps and hence as the large caps have been rising over the last year, that's clearly held up the AD volume while the equal weighted standard AD chart has moved lower.

Although that's just speculation on my part, as I'm not certain how they compile the AD volume data. But seems the logical assumption to me.

The main think that I noticed this week was how neutral everything is in the market breadth in terms of the Weight of Evidence on all time frames. Not sure what to make of it... so am staying relatively cautious until there's some more clarity.

RE: Market Breadth Update - isatrader - 2015-01-14

Here's an update of some of the NYSE and Nasdaq Advance decline and New High New Low charts

       

       

RE: Market Breadth Update - Amedee - 2015-01-14

(2015-01-14, 12:17 PM)isatrader Wrote: Here's an update of some of the NYSE and Nasdaq Advance decline and New High New Low charts

In other words, are you still bullish or bearish or neutral?
Do you see positive or negative divergence with the trend of NYSE or DJIA?
I think this is, for now, a very interesting and difficult topic... Big Grin

RE: Market Breadth Update - isatrader - 2015-01-14

(2015-01-14, 06:05 PM)Amedee Wrote: In other words, are you still bullish or bearish or neutral?
Do you see positive or negative divergence with the trend of NYSE or DJIA?
I think this is, for now, a very interesting and difficult topic... Big Grin

Neutral currently, as the Weight of Evidence from the various breadth charts is the most neutral it's been for a very long time. So not giving many clues on direction imo, so I have just made a few test buys this week, to add to my already open positions that were doing ok. So am about 70% invested and 30% cash at the moment.

RE: Market Breadth Update - Amedee - 2015-01-15

(2015-01-14, 06:10 PM)isatrader Wrote:
(2015-01-14, 06:05 PM)Amedee Wrote: In other words, are you still bullish or bearish or neutral?
Do you see positive or negative divergence with the trend of NYSE or DJIA?
I think this is, for now, a very interesting and difficult topic... Big Grin

Neutral currently, as the Weight of Evidence from the various breadth charts is the most neutral it's been for a very long time. So not giving many clues on direction imo, so I have just made a few test buys this week, to add to my already open positions that were doing ok. So am about 70% invested and 30% cash at the moment.

I am about 30% invested and 70% cash. My short term indicators are negative. And the following long term indicator worries me.
It is the P&F bullish percent indicator (long term indicator) but plotted as a line chart. I also remark the divergence between the BPLine and the indexes (easier to see on the BP line chart then on the P&F BP chart, see lowest chart)
For people that are not familiar with the bullish percent (from the book of Jeremy Du Plessis): it measures the percentage of stocks in a index where the last point and figure signal was a double top buy (knowing that is doesn't matter how many colums back the signal occured, provided there has not been a subsequent double bottom sell!)
   
Du Plessis writes extensively about this indicator:
- Area above and beneath 70 (range 80-60) = normal bull market
- Area around 50 (a band of 3 % above and beneath) = trend change area
- Area between 70 and 30 = trend change area (if the BP oscillates above and below the 50 band, without ever reaching 70 or 30) it indicates uncertainty about the prevailing trend. But if, the BP falls to the 50 band and bounces back towards the 70 level, it is a reinforcement of the uptrend (I am waiting for that one...)

To be complete, here is the BP point and figure chart
   

Any other thoughts on the long term?

RE: Market Breadth Update - isatrader - 2015-01-15

(2015-01-15, 10:53 AM)Amedee Wrote: I am about 30% invested and 70% cash. My short term indicators are negative. And the following long term indicator worries me.
It is the P&F bullish percent indicator (long term indicator) but plotted as a line chart. I also remark the divergence between the BPLine and the indexes (easier to see on the BP line chart then on the P&F BP chart, see lowest chart)
For people that are not familiar with the bullish percent (from the book of Jeremy Du Plessis): it measures the percentage of stocks in a index where the last point and figure signal was a double top buy (knowing that is doesn't matter how many colums back the signal occured, provided there has not been a subsequent double bottom sell!)

Du Plessis writes extensively about this indicator:
- Area above and beneath 70 (range 80-60) = normal bull market
- Area around 50 (a band of 3 % above and beneath) = trend change area
- Area between 70 and 30 = trend change area (if the BP oscillates above and below the 50 band, without ever reaching 70 or 30) it indicates uncertainty about the prevailing trend. But if, the BP falls to the 50 band and bounces back towards the 70 level, it is a reinforcement of the uptrend (I am waiting for that one...)

To be complete, here is the BP point and figure chart

Any other thoughts on the long term?

I post the Bullish Percent Charts for the NYSE and Nasdaq every week on Elite Board thread and so hopefully the members understand them, but it's been a while since I've explained them for the newbies, so thanks.

Dorsey has a useful playbook for the Bullish Percent which you might have seen before (See attached). But it's advice for the current situation is logical. i.e. defensive posture, reduce equity exposure, raise cash, Hold strong RS sectors, Sell weak RS sectors, Hold leaders (strong RS) stocks, Sell laggards (weak RS) stocks, Use trendline stops etc...

But until the BP reverses back to Os again, I'm still going to err on the cautiously positive for the long term still, as we still have the ball currently, and the October flush cleared out a lot of the over exuberance in the market, with the percentage of stocks above their 150 day MA's getting down below the key 30% levels in the US markets. But the short term is very shaky with the increase in volatility, and copper breaking down into a major Stage 4 decline isn't going to help with additional pressure from margin calls from those traders/funds who might have to sell stocks they own to cover the calls.

Interesting times...

RE: Market Breadth Extra - Amedee - 2015-01-15

I don't know if this podcast from DWA/Tom Dorsey is free for everybody, but you can try...

http://media.dorseywright.com/rss/DorseyWrightPodcast476.mp3

Good luck,

Historically, copper or oils move at the end ??? - JimStudent - 2015-01-16

It is interesting to me in Stan Weinstein's "Technically Speaking" interview he was asked the question, "You spend a lot of time with industry groups. Have you observed a definable sequence regarding group rotation at market tops and market bottoms?"

Stan - "I would say that historically, starting a move, investors usually go first to quality - good blue chip - and then will fan out to the wildly speculative stocks, ....... At the end of the game it becomes wildly blue-chip again. This to me is a clearer sign than saying........... Historically, copper or the oils move at the end but it doesn't always turn out to be true. These kinds of thing can be a claptrap................. " Pg 447.

My observation - it might not be a clear sign or true this time but if you overlay copper and oil over the S&P, and if copper and oil foreshadow a top we are about to see the bull turn into a bear. (I've been wrong allot as I am learning but I find it fascinating the study of Weinstein's methods.)