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RE: Market Breadth Extra - isatrader - 2013-12-12
(2013-12-12, 06:45 AM)JimStudent Wrote: Can you educate me about the 52 week new high. From looking at the 52 week high being above it's 50 day moving average, I would say everything is bullish.
"MacNeil Curry, Head of Global Technical Strategy at Bank of America Merrill Lynch," sees the 52-week high differently.
"If you look at new 52-week highs, that has slowly been declining," says Curry. "If you look at the percent of stocks in the New York Stock Exchange trading above their 200-day [moving average], that is starting to decline." While that in and of itself doesn't mean a correction will occur, it increases its probability, says Curry." http://finance.yahoo.com/blogs/talking-numbers/bofa-merrill-lynch-prepare-20-correction-next-152010397.html
I appreciate insights on how to interpret the 52-week highs.
Hi Jim, the 52 week highs has been decreasing over the last few months since October, when it had a very strong surge to near it's highs of the year, which were set in January, and yesterday the new highs reading was only 62, compared to the new lows reading of 42. See below chart - the grey area is new highs, and the red area is new lows.
When the new highs reading gets below 100 (blue line), it then enters what I call neutral territory, as the amount of new lows tends to stay below 100 during an uptrend except when there is corrections. So when new highs drops below 100 it gives the news lows a chance to overtake the new highs, as you can see on the above chart in June and August, and the market corrects. And hence currently with only 62 new highs and 42 new lows yesterday, there is a chance that the current correction could worsen, but on the flip side of that it can also be a great time to buy and hence why I refer to it as neutral territory, as unless the new lows spike strongly above the new highs then the trend will likely resume.
The next chart that I post is the 5 day total of the US market New Highs minus the New Highs. So it gives a slightly different perspective, as it's a combined chart of the new highs and new lows, and shows a weekly view of what's going on in the whole US market. And because it's a combined chart, it also has zero line, which is the point where the bears overtake the bulls if it falls below that, as you can see in the brief spikes down in Jun and August.
Currently, it's the lowest it's been for a few months, but other than that it's still well above it's zero line for the time being. So I would say it's giving a warning, but unless it moves below the zero line the bulls are still in control.
The third chart that post each week is the Cumulative New Highs minus the New Lows in the NYSE, which I've setup with a 50 day simple MA for a signal line. So when it's above it's rising 50 day MA then it's bullish, and when it's below it's falling 50 day MA then it's bearish.
The two indicators at the bottom are setup in the same way as the "Momentum Index (MI)" on the Advance Decline line charts that is explained in the book. Basically, the top indicator is a simple 50 day MA of the New Highs minis the New Lows data, and crosses above and below the zero line are the signals. And the bottom indicator is setup the same as the Momentum Index and is a simple 200 day MA of the New Highs minis the New Lows data, and crosses above and below the zero line are the signals.
So currently as you can see, the 50 day MI recovered recently and made a new high above it's September high and is well above it's zero line currently. Whereas the 200 Day MI has been going sideways for most of the last six months or so, and recently started to decline a little, although it's a long way above it's zero line. And hence the cumulative chart doesn't suggest any major warning signs currently, just a slight loss of momentum in the longer term.
Overall, the short term 1st chart is in Neutral territory, the 2nd more medium term chart is in Neutral+ territory and the long term term cumulative chart is still in Bull territory imo.
There are however warning signs in the other breadth indicators currently like the Advance Decline line and the moving average breadth charts, so you need to access them as a whole and decide what the majority is telling you.
I hope that helps you understand the various New Highs New Lows charts that I post each week.
[Update: 12/12/13] Today saw the 52 week New Lows figure jump to 105 compared to only 32 New Highs. So the short term for the New Highs New Lows has now moved into Bear Alert status. I will do a full update at the weekend.
RE: Market Breadth Extra - JimStudent - 2013-12-13
Thank you very much for the detailed explanation.
Advance Decline Breadth Charts - isatrader - 2013-12-15
Attached is the updated Advance Decline Breadth Charts, including the cumulative AD line, momentum index, cumulative AD volume line, 10 Day AD oscillator and the McClellan Oscillator and Summation Index.
RE: Market Breadth Extra - isatrader - 2013-12-15
Attached is the New Highs / New Lows charts.
Market Breadth Update - isatrader - 2013-12-15
Attached is the NYSE Bullish Percent Index and the NYSE long, medium and short term moving average breadth charts.
The market appears to be at a short term crossroads, with the short term moving average breadth charts all turning negative last week, and the medium and longer term charts sitting one box from a Bear Confirmation status also, the weighting is clearly on the negative side currently. But, with a Fed meeting this week that's got a lot of attention in the media, we could see some volatility during the week with the breadth charts being so close to status changes, and so I'm wary of a shakeout and am going to personally reserve judgement on any status changes until after the meeting has been digested by the market. But that's just my opinion, and you should draw your own from the charts below.
The NYSE Bullish Percent Index
NYSE Percentage of Stocks above their 200 Day, 150 Day and 50 Day Moving Averages P&F charts
NYSE Percentage of Stocks above their 200 Day, 150 Day and 50 Day Moving Averages line charts
S&P 500 Cumulative P&F Breakouts - Breakdowns - isatrader - 2013-12-15
Attached is the exclusive S&P 500 Cumulative P&F Breakouts - Breakdowns charts.
There was 13 breakouts and 21 breakdowns this week in the S&P 500, which takes the total for December so far to 28 breakouts and 38 breakdowns, which has meant a slight pullback in the uptrend to just below the rising 20 day moving average once more. And so currently that puts this measure into neutral territory, as although the cumulative total doesn't fall below the 20 day MA often to be more negative I'd want to see the 20 day MA flatten and turn down also, and hence for the time being I think the data suggests it's only a pullback currently, and so it needs more confirmation until it's considered anything worse imo.
The next charts I've setup in the same way as the 10 Day MA Advance Decline Oscillator and the Momentum Index, in that they are just moving averages of the straight breakouts minus the breakdowns data with the pure data hidden. For example, you can see the 20 day MA on the third chart above with grey straight breakouts minus the breakdowns data, and the 20 day MA on it's own in the second chart below.
The 20 day MA has been the main moving average I've been using for these breakouts minus breakdowns charts since I began doing them as it's equivalent to one month of trading days. But I thought it would be interesting to look at a shorter 10 day MA and a longer 50 day MA also, to get a perspective from different timescales. The results are interesting in that although the short term 10 day MA has broken below it's zero line, and the 20 day MA is approaching it's zero line also, the 50 day MA had strong surge in October to highs not seen since January and is currently still above it's summer highs, although it's been trending lower over the last month. However, it's a long way from a bearish zero line crossover which was last briefly seen in November 2012, and so by this more medium term measure it seems less bearish than the short term which is negative.
Disclaimer: This indicator is something I've created myself and been following over the course of the last year or so, and so the data sample of only two years is still very small and hence I'm still working out how to best interpret the data, and that will get better with time. But it's seems to have a lot of promise so far imo...
S&P 500 / Index and Equity Options Ratio - isatrader - 2013-12-15
Attached is the updated S&P 500 / Index and Equity Options Ratio charts which I haven't posted for a while. The Index Options which are more associated with professional traders has been consolidating over the last few months, while the Equity Options which are more associated with retail traders has continued higher.
My observations of the charts is that big moves usually happen when the Index Options are on the same page as the Equity Options, and seem to have more weighting over the market moves than the the Equity Options as you'd expect as professional traders have significantly more money in the market. So although the combined chart ($SPX:$CPC) is still moving higher the professional traders seem to be indicating a neutral stance on direction at this point imo.
US Industry Sectors Breadth - isatrader - 2013-12-15
Below is the data table for the Percent of Stocks Above 150 Day Moving Average in each sector which I've ordered by relative strength, with the highest to the lowest percentage in each sector. Also attached is the visual diagram of the 9 sectors and the NYSE Percentage of Stocks above their 150 day Moving Averages line chart.
The remaining three stronger positive sectors turned negative this week, with strong percentage moves down in most sectors. Industrials remained the strongest however with only a small sell off by comparison, but the rest of the sectors were hit quite hard with an additional 10.05% of Consumer Staples stocks falling below their 150 day moving averages. Basic Materials remains the weakest sector at 47.58% of stocks above their 150 day moving averages and is the first to drop below the 50% level into the bearish half of the scale, with Utilities not far behind at 52.38%. But although moving lower overall the rest of the sectors remain in the upper mid range on the bullish side of the scale for the time being, and so unless we see more sectors closing below the 50% level into bearish territory I'd give the sector breadth a Neutral- rating currently.