Market Internals 2013-06-20

By Lawrence

Monthly update on market internals.

The current snapshot of S&P 500 3-Day Advance Issues, Tick16 Short Term + Long Term as of 2013 Jun 20 close.

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Reading

1. Long Term Tick16 (yellow line) well above neutral zone heading down

2. Short Term Tick16 (red line) moving down towards oversold area

3. 3-Day Advance Issues (green line) sold off down to new low together with S&P

 

Inference

a. #1 is bullish pointing to selloff should be bought

b. #2 points to a short term bottom is coming soon

c. #3 4th lower low matching the S&P points to a complex low in the making

 

Last update I was looking for a top that will lead to significant correction. We have that in progress now.

This corrective move in ES has not produced a bearish trend in 3-Day Advance Issues or TIck16 which implies another important swing low is in the making.

To time the swing low focus on Tick Index based divergence over a 2 to 3 day period to identify the potential bottom. Another sign to look for is that 3-Day Advance Issues would stay at the bottom for several days creating a powerful setup to squeeze S&P higher.

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