21 replies to this topic

[IYB]

Since I know this question is coming I'll jump out in front of it. No - I do not see this as a Seven Sentinels Sell Signal, any more than were March 30 or April 20 during the initial advance earlier this year, for example. This is the first real pullback since the rally began, and just like those two examples (where the seven went to sell side for a day or two), in a powerful upward thrust, each proved to be excellent entry points. I've been patiently waiting for this kind of activity to provide a good entry, as said Sunday, and had expected the pullback to punch thru on all seven like the two examples shown in the chart below:

Just my humble interpretation. Good trading all, D

http://stockcharts.com/c-sc/sc?s=$NYMO&p=D&st=2009-01-01&en=2010-01-01&i=p61848919345&a=173216384&are=197.png

Edited by IYB, 11 August 2009 - 05:31 PM.

[inamosa]

Don, I'm curious what you do to filter out the "noise" or non-actionable signals (although they normally wouldn't come along too often, I gather)? Is there not sufficient divergence this time? Thanks

[But Daddy]

Echo, if you see this, what is your read of the NYMO today in relationship to your comments this weekend? Thanks, BD.

[punter]

Thanks for your timely post again. Although I disagree and use a different system, your point of view actually keep me on my toes. cheers.

[inamosa]

Thanks for your timely post again. Although I disagree and use a different system, your point of view actually keep me on my toes. cheers.

Me too - but I have to inquire as to what's keeping Don from being bearish here, knowing how good of a trader he is

[Echo]

BD, Alas, my post this weekend failed Occam's razor in that it was simpler than needed. I'll expand soon, but for now, I'd suggest looking to the data that serves the basis of NYMO and that would be the NYAD. That is not suggesting bearish divergence at this time but did have bullish divergence in June-July. That plus the NYSI sporting a 3 step bullish pattern and the absolute value of the NYSI at this time, in a normal world, that would argue against any large drop in price. We just had a flood of liquidity that is an 8 on the Richter scale, a Cat-5 on the Saffir-Simpson scale and an F-5 on the Fujita scale. Add to it the fact that just about everyone would LOVE for this market to drop back to the 970-950 zone to jump on the train they feel they missed, much less the 920-930 area, it makes you wonder if there will be enough selling pressure for any meaningful drop, or for that matter, if the buying pressure will allow it. From a Hurst perspective, there is absolutely nothing bearish at this time for the shorter cycles, except a 2.5 wk low due in the next few days. I'd hafta agree with Don here, but realize that this movement of the SS to the sell side of the equation is likely associated with relieving the short term overbought situation rather than the start of an extended downtrend. I would worry more however, if NYMO breaks the uptrend line from June-July which comes in for tomorrow around -37 level or so and especially if it breaks the July divergent lows. From a post below, it appears that Denleo is thinking along the same lines. Echo

[IYB]

BD,

Alas, my post this weekend failed Occam's razor in that it was simpler than needed. I'll expand soon, but for now, I'd suggest looking to the data that serves the basis of NYMO and that would be the NYAD. That is not suggesting bearish divergence at this time but did have bullish divergence in June-July. That plus the NYSI sporting a 3 step bullish pattern and the absolute value of the NYSI at this time, in a normal world, that would argue against any large drop in price.

We just had a flood of liquidity that is an 8 on the Richter scale, a Cat-5 on the Saffir-Simpson scale and an F-5 on the Fujita scale.

Add to it the fact that just about everyone would LOVE for this market to drop back to the 970-950 zone to jump on the train they feel they missed, much less the 920-930 area, it makes you wonder if there will be enough selling pressure for any meaningful drop, or for that matter, if the buying pressure will allow it.

From a Hurst perspective, there is absolutely nothing bearish at this time for the shorter cycles, except a 2.5 wk low due in the next few days.

I'd hafta agree with Don here, but realize that this movement of the SS to the sell side of the equation is likely associated with relieving the short term overbought situation rather than the start of an extended downtrend. I would worry more however, if NYMO breaks the uptrend line from June-July which comes in for tomorrow around -37 level or so and especially if it breaks the July divergent lows.

From a post below, it appears that Denleo is thinking along the same lines.

Echo

Thanks for the superb analysis Echo! You saved me a lot of work and provided a better explanation than I cudda. I agree with all of that, including watching the lows. Regards, D

Edited by IYB, 11 August 2009 - 07:25 PM.

[MoneyFriend]

IYB, To be clear, you expect today was the low for the next 3 to 4 weeks similarly to 3/30 and 4/21? Thanks.

Edited by MoneyFriend, 11 August 2009 - 07:40 PM.

[selecto]

Watch out IYB - spx ema 5 turned down today and psar went to sell. - typically, not signs of the end of the move. Not particularly sophisticated analysis I know, but what the hay, I just trade 'em.

Edited by selecto, 11 August 2009 - 07:55 PM.

[GreatWarrior]

http://stockcharts.com/c-sc/sc?s=$NYMO&p=D&st=2009-01-01&en=2010-01-01&i=p61848919345&a=173216384&are=197.png

Hold on IYB. I am confused. In your charts above it seems like it is implying a PERFECT SSBS for your system for catching the bottom.

But I thought your system sent out a few SSSS during the rally from March bottom. So now where are these signals on the chart above? I thought there were at least 2?