As mentioned before, I am not a fan of astrology, it is quite difficult for me to accept that this chart has actual projection value. But given what happened so far, it has done a pretty good job in highlighting the swing tops and bottoms this year.

Going forward, the projection points to:

1. a significant decline should start now and that it should lead to a selloff ending sometime in mid June

2. a rally into August with another all time high

3. major selloff all the way into December

It will be interesting to see how the stock markets unfold going forward.

The current snapshot of S&P 500 3-Day Advance Issues, Tick16 Short Term + Long Term as of 2013 May 17 close.

Reading

1. Long Term Tick16 (yellow line) moving back up to right below neutral zone.

2. Short Term Tick16 (red line) moving back up to neutral zone.

3. 3-Day Advance Issues (green line) bounced off zero line once and divergence from new high prints in S&P

Inference

a. #1 is bearish pointing to potential important top in the making

b. #2 points to breakout mode where next move can be very explosive in either direction

c. #3 Very strong bearish divergence points to a quick selloff or consolidation in the making

Last update predicted a potential short term bottom in the making and that was one powerful rally from that bottom.

Current rally has very strong signature of blow-off top thus it is important not to chase this rally.

This pattern, however, has happened once before back in July-Aug 2012. The 3-Day Advance Issues will correct itself as that is the nature of the statistics. If by the time it has moved back down to below neutral zone while S&P going sideway or pullback just a little only as in late Aug to early Sep 2012 , we will get a powerful short squeeze as a consequence.

My perspective is that it is not necessary to have many monitors especially if you are not monitoring multiple markets. Some traders find that less is more. One big chart with your primary timeframe plus a few smaller charts is often enough. Ms. Raschke trades many markets with just a few trading setups. Hence the need of more monitors.

One thing I like to add here is that sometimes the mistake is not yours.

It can be your broker who made the mistake for call in orders. It can also be technical problems like internet outage, power outage, brokerage side connection to exchange is down. You name it, I probably experienced that.

It is not, however, an excuse or reason to not fix the problem right the way.

The funny thing is that I am thinking of writing about trading plans and then I found this video.

Coincidence or is it something meant to be? (wink wink …)

Did some clean up work for the site and organized 2 ongoing series so that they now have their own landing pages.

One is the Trading With Tick Index series.

The other is the Market Breadth Primer series.

Should make it much easier to look for the articles now.

Enjoy!

Following chart marks the points where the signal occurred.

The most powerful thing with this setup is that if the market is going higher, it happens the very next trading day.

The Setup

1. Advance Issues / (Advance Issues + Decline Issues) <= 0.25 two days in a row

2. Open greater than close on the signal day

It is simple and it works.

Variations

You can lower the threshold form 0.25 to 0.24, 0.23 or even lower to reduce the total number of signals but it is not necessarily a good idea as the best reversals do not correlate well with more extreme selling. They correlate more with the context on how the market sold off into these extremes.

The price filter can be removed and it will still work, just that the reversal would have happened on the signal day and leaving not much room to go higher for the next trading day. As a longer term signal, the price filter can be removed with your own rules to improve the entry.

Notes

For daytraders, it may not be as useful as the statistical biases you get from Market Breadth Primer: Advance / Decline Issues since this setup only occur a few times a year. But it is a very strong setup that daytraders should be aware of. Turning into roadkills by the raging bulls who step into the market to pick bottom, or a floodgate of shorts covering their positions, is not funny.

Under premium models, a new section called daytrading biases will list all the relevant articles matching the closing conditions of the US stock markets. This new reporting ability should make it easier for premium members preparing for the next trading day.

Once this new feature is fully ready, I will have it added to the Forex Signals page as well.

Think of this new service as an intelligent trading assistant who will carry out the research work for you.

It is a funny talk. Mr. Smith delivered a great talk and it is very much to the point.

To follow your passion – you may not even know what your passion is. And when you do, you may not have the courage to pursuit your dreams. And most important of all, you may fail and it is something you have to learn to accept and move on.

To my younger readers – you may not know for sure trading is where your passion is. You may have chosen the wrong instrument to start with. Until you experiment enough you may never know. Most of us may not have what it takes to be great traders. But there is always room for decent traders to make a living. If trading is something you truly love to do, you can make it work too.

I marked the first quarter STOPD Levels.

If there is a 3rd push back up, it will be back up to 107-107.5 where the 1st quarter low is.

It is not a long term bullish play.

Instead, this 3rd push up is a short term counter-trend swing play.