Fib, if you would be so kind...
Have a question. Has there been such a sustained decline in the NYSI, without even a hook, before this. If so, when and what came next?
If you're referring to sustained downside moves in the NYSI that take it from readings above +500 and then down and through the zero line then, yes, fishhooks, ledges and bounces off the zero line are usual and customary in the majority of these unwinding processes, but there have been times in the past where we see rapid shifts in money flow without seeing a breather as to the amplitude of the decline in the NYAD line itself. These windows tend to be cyclically in nature as the market "gets with the program" and realizes its error and tries to correct the situation as quickly as possible...usually into the nesting of these same cyclical lows such as the 9 month which, interestingly enough, is due in early November. Though rare, these power shifts in moving all of the willing and unwilling sellers to a negative reading in the NYSI do happen usually after a long period of complacency (low volatility readings), and they are then usually followed by a divergent sequence later on as to make up for the loss of this same "technical obligation" to at least take a pause in the action during the sell off. Doing a cursory view of the NYSI over the last 20 years, and the last such event was the decline we saw in the April to August period of 2002 that produced the orthodox lows in that bear market.
Now with all that said, it's still not too late to see a ledge (or even a fishhook) develop over the next week or so before we see a final bottom in the current NYSI which would also compliment a further washout in both price and sentiment (high TRIN readings). This would follow along the path of the strong divergence we currently have with all of the McClellan Oscillators after they rebound to or toward their zero lines. At this point, however, although we have quite a bit of evidence that a major price bottom is being created, we still don't have the necessary confirmation as yet to be comfortable with that call....but the odds are very high based on historical comparisons.
Edited by fib_1618, 26 October 2018 - 12:01 PM.