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

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RE: Market Breadth Update - goodtyneguy - 2013-04-15

Here is an interesting way to use the McClellan indicators with moving averages.

   

Also this from the McClellans themselves on determining who is in control of the markets from this article. Important excerpt below:

   

There is a rule that we use when interpreting the Oscillator's structure: The complex side is the strong side.  What I am referring to is a complex structure that is entirely above or below zero, with lots of chopping up and down but without a crossing of the zero line.  When you see that, the message is that whichever side of zero it is forming on is the side that is in control.  So a choppy complex structure above zero means that the bulls are in charge, whereas a complex structure below zero means that the bears are in charge.
A "simple" Oscillator structure is one where you see it move across the zero line and then turn straight around without building any complexity.  Such a structure says that there is no control of the market by the side on which the simple structure forms.

Moving Average Breadth Charts - status change - isatrader - 2013-04-16

The short term NYSE Percentage of Stocks above their 50 Day Moving Averages chart broke down strongly today to move back to "Bear Confirmed" status. The S&P 500 Percentage of Stocks above their 50 Day Moving Averages chart also moved moved to Bear Confirmed.

[Image: attachment.php?aid=867]

[Image: attachment.php?aid=868]

But most notable for me personally in today's big sell off was that the "head coach" - the long term NYSE Bullish Percent Index got within .05 of reversing to a column of Os for the first time since the 20th December. And so there's a good chance of that happening tomorrow if the sell off intensifies.

[Image: attachment.php?aid=869]

New Highs New Lows $NYHL - isatrader - 2013-04-16

The Daily New Highs - News Lows in the NYSE turned negative yesterday for the first time since November.

   

NYSE Bullish Percent Index $BPNYA - reversal to defense - isatrader - 2013-04-17

I noted yesterday that the long term NYSE Bullish Percent Index ($BPNYA) was very close to reversing to a column of Os (Defense) within overbought territory. Well today even with the market rebounding higher, the NYSE Bullish Percent Index closed below the 72% level and so reversed to column of Os for the first time since December - which puts it on "Defense" in the high risk zone. i.e. Supply is in control of the market and the defensive team is on the field, and so the "head coach" suggests that we now should move into wealth preservation mode.

Dorsey Wright has done a lot of work on the NYSE Bullish Percent Index over the years and came up with a playbook for it which you can get on their website. What it suggests when the Bullish Percent is in the "Red Zone" (above 70%) and on Defense (column of Os) is to:
  • Aggressive Defense
  • Decrease volatility
  • Raise cash levels
  • Reduce exposure to offensive sectors
  • Tighter stops on longs
  • Sell leaders & laggards on breakdowns
  • Buy protective puts to hedge
  • Buy inverse funds to hedge
  • Initiate Short Equity exposure
  • Increase non-correlated exposure

[Image: attachment.php?aid=882]

RE: Stan Weinstein's Stage Analysis - Discussion Thread - Lplate - 2013-04-17

(2013-04-14, 10:43 PM)isatrader Wrote: Attached . . . European Stock Indexes
Great set of charts as usual isatrader, thank you.
I'm sure you've all noticed this. Am I interpreting this right?
DAX broke 7600 support and so far failed in retest from below. http://scharts.co/ZZHZOE
Now around 7550. Target 7500 200 day SMA, and 7000?
Within investor MA uptrend, but trader start of downtrend, so I interpret this as investors should be out, and traders can think about shorting.
Could be similar to 2012

RE: Stan Weinstein's Stage Analysis - Discussion Thread - isatrader - 2013-04-17

(2013-04-17, 12:09 PM)Lplate Wrote: Great set of charts as usual isatrader, thank you.
I'm sure you've all noticed this. Am I interpreting this right?
DAX broke 7600 support and so far failed in retest from below. http://scharts.co/ZZHZOE
Now around 7550. Target 7500 200 day SMA, and 7000?
Within investor MA uptrend, but trader start of downtrend, so I interpret this as investors should be out, and traders can think about shorting.
Could be similar to 2012

I hadn't looked at the Dax since the weekend, but noticed a similar Stage 3 forming in the FTSE 100 and so did a speculative short in that yesterday just before the close, which is making similar moves to the Dax today as well.

If the Dax can close below the 7500 then I think you could call it as very early Stage 4A, but as you said the 200 day MA is very close which often offers support. The relative performance versus the S&P 500 broke down below the zero line over three weeks ago, and the 30 week MA is flattening. So it looks to be weakening, and so as you said traders could attempt shorting it around here I think as it's forming a potential Stage 3, but would be too early for investors imo, as the investor stop loss should probably be around the 7400 level imo, if it had been kept below the 30 week SMA, but could be under 7500 if the investor had made the decision to move up tightly under the swing low if they felt the rally was getting extended, as it suggests in the book. And so investors following the method would probably be considering exiting some or all of their long position if it does breakdown here.

The initial swing target if it does breakdown into early Stage 4 looks to be around the 7000 level as you said. Attached is the weekly and daily charts to compare with yours.

RE: Stan Weinstein's Stage Analysis - Discussion Thread - isatrader - 2013-04-17

It'll be interesting to see if Weinstein does an interview this week, as I'm assuming that he's not been back on the Financial Sense Newshour since November, because his bearish call of moving into a major Stage 4 within 3-6 months of the interview turned out to be wrong, and was a false breakdown with the US market 10%+ higher now. So I think he could be waiting for the next turn to do another interview, which we could be seeing this week with some Stage 3 topping action and early breakdowns occurring in some of the major US indexes and the breadth breakdowns. So will keep an eye out for it as it is always interesting and gives us more insight on the method.

RE: Stan Weinstein's Stage Analysis - Discussion Thread - Lplate - 2013-04-17

(2013-04-17, 06:40 PM)isatrader Wrote: It'll be interesting to see if Weinstein does an interview this week, as I'm assuming that he's not been back on the Financial Sense Newshour since November, because his bearish call of moving into a major Stage 4 within 3-6 months of the interview turned out to be wrong, and was a false breakdown with the US market 10%+ higher now. So I think he could be waiting for the next turn to do another interview, which we could be seeing this week with some Stage 3 topping action and early breakdowns occurring in some of the major US indexes and the breadth breakdowns. So will keep an eye out for it as it is always interesting and gives us more insight on the method.
In talking to another chartist interviewee about a month ago, Jim Puplava said that the point about chartists is that they go where their market signals lead them and gave the example that Weinstein had indeed changed his mind a few weeks after the Nov interview and became bullish.
Yes you are right, it would be interesting to hear his view soon on the prospects for the summer months, but I fear he interviews only when he wants to push his rather pricey subscriptions. If only he did a "ultralite" version - at an ultralite price!