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Stan Weinstein's Stage Analysis and Market Breadth - Technical Analysis - Printable Version

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RE: Market Breadth Extra - pcabc - 2015-10-05

(2015-10-05, 11:25 PM)isatrader Wrote: So I'd say the improvements in the Percentage of Stocks above their moving averages would change the overall breadth status to Neutral imo.

From the charts I am plotting it all looks quite bearish. However, the P&F is an interesting counterpoint.

RE: Market Breadth Extra - isatrader - 2015-10-06

(2015-10-05, 11:52 PM)pcabc Wrote: From the charts I am plotting it all looks quite bearish. However, the P&F is an interesting counterpoint.

The Percentage of Stocks is usually an early mover, and can be months ahead sometimes, hence why the Weight of Evidence approach in the method is very important as we'll need to see similar signals in other breadth charts develop also for the Weight of Evidence to become bullish. But I see it as a sign to start doing some initial long research again and to begin generating a watchlist of stocks that could be potential early leaders when the Stage 4 ends. But research is all I'll be doing until the Weight of Evidence becomes bullish and the market moves into Stage 1 at least. So I'm not expecting to do anything much for a while still, but want to be ready if things change sooner than I expect to start building a new portfolio.

RE: Market Breadth Extra - shaunattwood - 2015-10-06

Look at the chart of the Dow in early 2008. The 150 day ma had rolled over into bearish territory (like now) but the Dow still managed some huge rallies, one of which actually took it back above the 150 day ma. Bear markets usually last 9 to 18 months. In that previous bear market, I found MACD useful for timing short sale re-entry points. Investors tend to get bullish on these bear market rallies, only to be wiped out by the next plunge.

RE: Market Breadth Extra - pcabc - 2015-10-06

(2015-10-06, 05:08 PM)shaunattwood Wrote: Look at the chart of the Dow in early 2008. The 150 day ma had rolled over into bearish territory (like now) but the Dow still managed some huge rallies, one of which actually took it back above the 150 day ma. Bear markets usually last 9 to 18 months. In that previous bear market, I found MACD useful for timing short sale re-entry points. Investors tend to get bullish on these bear market rallies, only to be wiped out by the next plunge.
I thought I'd post the breadth charts for DJI versus NYSE for 2008 and now for comparison. Tempting to just post the last decade as a 3000 pix wide monster but I thought better of it.

Given these are grabs of a large chart the keys are missing, so from top to bottom the graphs are:
  1. Dow Jones Industrial Average
  2. NYSE Cummulative advance/decline line
  3. Momentum index
  4. New highs - new lows
  5. Cummulative new highs - new lows and its 100 day simple moving average.

2008:
   

Now (2015):
   

Interestingly now looks like it could match either early 2008, before the big drop or late 2011 where the bull market seemed to have a wobble and resume. At present major indices seem to be climbing back up to their 50 day simple moving averages. I'm just keen that the whole thing picks a direction and does it. Sooner it does that the sooner normal service resumes!

RE: Market Breadth Extra - isatrader - 2015-10-06

(2015-10-06, 10:20 PM)pcabc Wrote: Interestingly now looks like it could match either early 2008, before the big drop or late 2011 where the bull market seemed to have a wobble and resume. At present major indices seem to be climbing back up to their 50 day simple moving averages. I'm just keen that the whole thing picks a direction and does it. Sooner it does that the sooner normal service resumes!

If only it were that easy eh! Like you said, there's a chance it's only a significant Stage 4 correction like in 2011, and the bull may reassert itself, or we could be seeing the start of the last sucker rally before another plunge into a more serious Stage 4 decline like Shaun has highlighted. So imo it continues to be a short term traders market with continued volatility likely, and so as an investor I'll be sitting on the sidelines until the medium term signs that I'm looking for start to appear. If Shauns right then that could be a long while yet.

NYSE and Nasdaq 20 year Advance Decline Volume charts - isatrader - 2015-10-06

Here's the 20 year Advance Decline "Volume" charts for the NYSE and Nasdaq markets which give an interesting long term perspective

       

RE: Market Breadth Extra - gbarbs - 2015-10-07

(2015-10-06, 10:42 PM)isatrader Wrote:
(2015-10-06, 10:20 PM)pcabc Wrote: Interestingly now looks like it could match either early 2008, before the big drop or late 2011 where the bull market seemed to have a wobble and resume. At present major indices seem to be climbing back up to their 50 day simple moving averages. I'm just keen that the whole thing picks a direction and does it. Sooner it does that the sooner normal service resumes!

If only it were that easy eh! Like you said, there's a chance it's only a significant Stage 4 correction like in 2011, and the bull may reassert itself, or we could be seeing the start of the last sucker rally before another plunge into a more serious Stage 4 decline like Shaun has highlighted. So imo it continues to be a short term traders market with continued volatility likely, and so as an investor I'll be sitting on the sidelines until the medium term signs that I'm looking for start to appear. If Shauns right then that could be a long while yet.

In 2011 we did not have a zero crossing of the MI. Since its been positive for such a long time, the zero cross carries more significance now, and it has also occurred.

RE: Market Breadth Extra - isatrader - 2015-10-07

(2015-10-07, 03:18 AM)gbarbs Wrote: In 2011 we did not have a zero crossing of the MI. Since its been positive for such a long time, the zero cross carries more significance now, and it has also occurred.

It did get close though, and we're currently at a similar level to the 2011 low for it as you can see on the attached 20 year Momentum Index chart. So it's in a battleground area imo, as a strong move below zero would add further evidence to the Stage 4, and strong bounce back into positive territory would give weight the other way.