22 replies to this topic

[inamosa]

I have always avoid reading some guy's post, not you. But when I read your very first Zweig Breadth, I had immediately questioned the 16% jump and warned others, I hope that I have prevent some people from being wipped out. No offend to you at all ...

No offense taken. We are all entitled to our own opinions. I think it's important to note that I have never told anyone or suggested to anyone that they should take on certain trades and/or investments (long or short). The breadth thrust information is simply that - factual information.

There are number of reasons one should have to place a trade and in this case I'm simply providing information that a poster here may or may not find useful in planning their next trade. I try to avoid doing more than that. You see, I'm not interested in advising people what they ought to do with their money - and, if I was, I certainly wouldn't be willing to do it for free.

[inamosa]

I guess differing views of the facts are what makes a market, eh?

I take issue partly with those who claim the thrust is a failure or success without allowing sufficient time to have passed to properly evaluate it, such as yourself. March 30th wasn't that long ago. I find breadth thrusts are best judged on a 3-month, 6-month, and 12-month basis - with the latter two being the most important. I have mentioned this to you twice before but you consistently ignore me and take jabs at me almost every time you see me (which is totally inappropriate given that I'm sharing numerical data with you and nothing more).

So far, the drawdown that has been experienced since March 30th is not at all unusual. The median drawdown following a Zweig breadth thrust, within the first 3 months, is 5.32%. So, from SPX 1328, the median drawdown would translate to SPX 1257. That is just the median.

In conclusion, I'm not sure what you gives you so much confidence in calling the March thrust a failure - and, regardless, you're jumping the gun by assuming it should be ignored.

Edited by alysomji, 06 June 2011 - 10:48 PM.

[K Wave]

I have always avoid reading some guy's post, not you. But when I read your very first Zweig Breadth, I had immediately questioned the 16% jump and warned others, I hope that I have prevent some people from being wipped out. No offend to you at all ...

No offense taken. We are all entitled to our own opinions. I think it's important to note that I have never told anyone or suggested to anyone that they should take on certain trades and/or investments (long or short). The breadth thrust information is simply that - factual information.

There are number of reasons one should have to place a trade and in this case I'm simply providing information that a poster here may or may not find useful in planning their next trade. I try to avoid doing more than that. You see, I'm not interested in advising people what they ought to do with their money - and, if I was, I certainly wouldn't be willing to do it for free.

Your implication was that it was pretty much a no-brainer to hold long...at least that's how I interpreted your original post.

That was the main reason I felt compelled to post an alternate view, based on the glaring exception to the rule that I saw, and a configuration suggesting that a major top was possibly starting to form, both on a price and time basis.

[inamosa]

Your implication was that it was pretty much a no-brainer to hold long...at least that's how I interpreted your original post.

No, I simply asserted that Zweig breadth thrusts have an impressive historical track record (and the one on March 30th, having met higher criteria that had even a somewhat more impressive history) - which implies that those who ignore these thrusts as part of their analysis may be doing so at their own peril.

I think that is an appropriate attitude to have.

P.S. Your thesis of a major top has not yet been borne out with the SPX 5.4% from its last 52-week high and not even below its 200-day moving average yet. Hope you're not attempting to jump to conclusions.

Edited by alysomji, 06 June 2011 - 10:58 PM.

[K Wave]

I guess differing views of the facts are what makes a market, eh?

I take issue partly with those who claim the thrust is a failure or success without allowing sufficient time to have passed to properly evaluate it, such as yourself. March 30th wasn't that long ago. I find breadth thrusts are best judged on a 3-month, 6-month, and 12-month basis - with the latter two being the most important. I have mentioned this to you twice before but you consistently ignore me and take jabs at me almost every time you see me (which is totally inappropriate given that I'm sharing numerical data with you and nothing more).

So far, the drawdown that has been experienced since March 30th is not at all unusual. The median drawdown following a Zweig breadth thrust, within the first 3 months, is 5.32%. So, from SPX 1328, the median drawdown would translate to SPX 1257. That is just the median.

In conclusion, I'm not sure what you gives you so much confidence in calling the March thrust a failure - and, regardless, you're jumping the gun by assuming it should be ignored.

If I turn out to be wrong about the high for the RUT being behind us, the beer is on me.

We are in the time window for the mid secular bear top...if we go above the the "Osama is Dead" sell signal, then we may be back in a longer term bull after all...

All my IT stuff is on sell, with some sectors on the verge of total breakdown...

Would we be agreed that if we take out the pre-thrust mid-March low, that the thrust signal has failed? Call it 1250 SPX?

You might want to have a good close look at the chart of FDX...huge breakaway gap down side off the top in Feb, and then a failed rally, and then a power break through the 200 day today...

Edited by K Wave, 06 June 2011 - 11:03 PM.

[IYB]

Your implication was that it was pretty much a no-brainer to hold long...at least that's how I interpreted your original post.

While you may have inferred the above, Aly's original post in no way implied this at all. It was a comment about context - one which was dead on. Those of us who regard context as an important ingredient in our trading decision making process appreciated the data and the historical record.

For the record, the context here is STILL that of a Primary Bull Market. But before you jump to the conclusion that this, too, implies that "it is a no-brainer to hold long", let me stress that the Primary Trend (like Breadth Thrusts) are just one element in the whole array of considerations a person needs to assess when setting up any trade....Best, D

http://stockcharts.com/c-sc/sc?s=$SPX&p=M&st=1996-01-28&en=(today)&i=p57004796817&a=181755078&r=970.png

[vitaminm]

In a bull market how many red months in a row?

[inamosa]

Would we be agreed that if we take out the pre-thrust mid-March low, that the thrust signal has failed? Call it 1250 SPX?

No, it would take more than that - as I don't just look at price but also the status of internals when considering whether a cyclical bull market is over. I have my own custom criteria and I can't easily predict where price will be when they are all met.

P.S. I wouldn't at all be surprised to see 1250 briefly taken out and then rallied back above, just so that this cyclical bull can take some more people off of its back. It's rare that a bull market correction ends before taking out a seemingly important pivot that many are watching.

[K Wave]

Your implication was that it was pretty much a no-brainer to hold long...at least that's how I interpreted your original post.

While you may have inferred the above, Aly's original post in no way implied this at all. It was a comment about context - one which was dead on. Those of us who regard context as an important ingredient in our trading decision making process appreciated the data and the historical record.

For the record, the context here is STILL that of a Primary Bull Market. But before you jump to the conclusion that this, too, implies that "it is a no-brainer to hold long", let me stress that the Primary Trend (like Breadth Thrusts) are just one element in the whole array of considerations a person needs to assess when setting up any trade....Best, D

http://stockcharts.com/c-sc/sc?s=$SPX&p=M&st=1996-01-28&en=(today)&i=p57004796817&a=181755078&r=970.png

Yes...context...the March 2009 and Sep 10 thrust were the classic thrust signals, in the proper context (the first one after and extended decline, and the second after a period of bull market correction), that were indeed pretty much no-brainers to hold long.

All I was saying...again.... is that I did not believe the signal in March to be in that class of signal, and that instead the signal should be sold on rallies, as it was more likely an exhaustion thrust than an initiation thrust, similar to the kind of action near the top in 1976.

And SO FAR...that is how it has played out.

That could change of course. But by following my own advice, I have fared pretty well over the last few months.

It probably gets a bit trickier from here, as we still have the summer months of the 3rd year presidential cycle dead ahead, which has traditionally been able to hold the market up. So the 200 day down there near 1250 SPX may prove tough to crack the first go at it.

Edited by K Wave, 06 June 2011 - 11:35 PM.

[relax]

remember the post back in march i also questioned the context isolated, yes, it looked like a breadth thrust but just like in november 2008, it came off a negative thrust (very low nymo) therefore what seemed like a thrust was probably just some sort of "balancing" of breadth