The current snapshot of S&P 500 3-Day Advance Issues, Tick16 Short Term + Long Term as of 2014 Jan 23 close.
Review
Short term bullish bias played out with S&P closing at year high by Dec 21, 2013.
3-Day Advance Issues breaking neutral zone decisively on 1st trading day of 2014 gave us a pullback to play with.
13th – 14th S&P spike low diverge against 3-Day Advance Issues higher low, gave us a another short term long and boom we have a new high for the year since.
Reading
1. Long Term Tick16 (yellow line) moving around neutral zone is neutral.
2. Short Term Tick16 (red line) moving around neutral zone is neutral.
3. 3-Day Advance Issues has a swing level divergence top over 3 weeks window. Bearish.
Inference
a. #1 and #2 combined into a strong compression breakout setup but no directional bias
b. #3 short term bearish until 3-Day Advance Issues reaching oversold level again
Long Term Outlook
Tick16 compression happened before historically quite a few times. There were no directional correlation with the setup but price movements intraday would often produce volatility greater than the daily level close to close changes on previous occurrences. It is a signature of market indecision.
Long term direction depends on a strong move in Tick16 out of the range which can last for months.
For now, focus on one to two day swings is more profitable.
Notes
I am working on a complete section in the website devoted to breadth analysis.
Once the new section goes beta, I will retire this monthly write up. I think the breadth reading I am providing now is not frequent enough to help everyone to understand the power of market breadth timing. By providing more information and explanation on market breadth based analysis techniques I know the new section will be useful for many traders.
Goal of the new section is to provide daily reports and charts of the custom breadth data on both US indices and forex markets. Once the daily updates are in place, it will be much easier to track the changes and utilize the information.
Since last update, there were 2 attempts of 1% bounce. Both failed to get any legs.
From both cases, the melt down mode were triggered leading to more selloff.
5% drop target ...
Review of Forecast for Oct 31, 2016
Attempted to bounce on Monday as expected. Dropped to 1.5% and opened the door to 2.5% downside move as forecasted. NFP Friday slowed down ...
Review of Forecast for Jun 15, 2015
The expectation of volatile price actions was correct with 1% swing down and then 2% straight up. The swing top potential is there given ...
Review of Forecast for Aug 1, 2016
No 1% move in either direction led to range bounded actions, so 2% breakout play not triggered. Longer term breadth sell setups not confirmed ...
Review of Forecast for Dec 7, 2015
Bearish expectation worked out. The expansion to 2.5% or more downside also worked out. The breadth analog model did an excellent job for the ...
Review of Forecast for Jul 13, 2015
First we have Greece last minute deal done, ramping S&P higher to the 1.5% mark which indicated further upside into the end of the ...
Someone asked what I mean by “custom tick divergence” in my real-time commentaries. Here are 5 charts (one day each) for the past week with Emini S&P, $Tick index and ...
It is 1 am Eastern Time and the overnight market is down at the moment.
Japan Nikkei is down more than 1%
But as of close of yesterday Aug 17, the Tick16 ...
Review of Forecast for Oct 17, 2016
Monday did not challenge Friday high, so no directional push towards previous week low. Instead, we got consolidation all week. The breadth analog model ...
Market Internals 2014-01-23
Monthly update on market internals.
The current snapshot of S&P 500 3-Day Advance Issues, Tick16 Short Term + Long Term as of 2014 Jan 23 close.
Review
Short term bullish bias played out with S&P closing at year high by Dec 21, 2013.
3-Day Advance Issues breaking neutral zone decisively on 1st trading day of 2014 gave us a pullback to play with.
13th – 14th S&P spike low diverge against 3-Day Advance Issues higher low, gave us a another short term long and boom we have a new high for the year since.
Reading
1. Long Term Tick16 (yellow line) moving around neutral zone is neutral.
2. Short Term Tick16 (red line) moving around neutral zone is neutral.
3. 3-Day Advance Issues has a swing level divergence top over 3 weeks window. Bearish.
Inference
a. #1 and #2 combined into a strong compression breakout setup but no directional bias
b. #3 short term bearish until 3-Day Advance Issues reaching oversold level again
Long Term Outlook
Tick16 compression happened before historically quite a few times. There were no directional correlation with the setup but price movements intraday would often produce volatility greater than the daily level close to close changes on previous occurrences. It is a signature of market indecision.
Long term direction depends on a strong move in Tick16 out of the range which can last for months.
For now, focus on one to two day swings is more profitable.
Notes
I am working on a complete section in the website devoted to breadth analysis.
Once the new section goes beta, I will retire this monthly write up. I think the breadth reading I am providing now is not frequent enough to help everyone to understand the power of market breadth timing. By providing more information and explanation on market breadth based analysis techniques I know the new section will be useful for many traders.
Goal of the new section is to provide daily reports and charts of the custom breadth data on both US indices and forex markets. Once the daily updates are in place, it will be much easier to track the changes and utilize the information.
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