8 replies to this topic

[IYB]

Some may remember our article of October 7, 2012 about the universal failure of all broader averages and all market internals to confirm the closing high of the DJIA on October 5, 2012 and our suggestion that external (market prices) would follow internal (broad averages, breadth, high/lows, etc) lower:

https://stockcharts.com/c-sc/sc?s=$NYMO&p=D&st=2012-09-03&en=2012-11-16&i=p79372172532&a=293790451&r=9220.png

The set of charts we've displayed below should serve to show a wide sampling of the massive and comprehensive "universal failure" of market internals to confirm last week's highs in the DJIA. The October 7th report also displayed the failures in the moving average of net advances and net new highs as well as the percentage of stocks (of various indices) over their 200, 50 and 20-day moving averages, various foreign stock indices, NYMO, NAMO, NYSI, NASI, as well as various Intermediate Term Indicators from Decision Point. We could display those here, but will spare the reader the trouble of reviewing all of those by simply saying that once again....ALL of those have failed to confirm. This failure is even more universal and deeper on individual charts than the October 5, 2012 universal failure.

Following that decline from October 5, we had the decline shown above - followed by a Seven Sentinels Buy Signal on November 23 and another IT uptrend..... but here we are again five months later. If October 5 was Universal Failure, March 1 was Universal Failure II. Good trading all, D

https://stockcharts.com/c-sc/sc?s=$NDX&p=D&yr=0&mn=6&dy=0&i=p60369313233&a=294643499&r=533.png
https://stockcharts.com/c-sc/sc?s=$INDU&p=D&yr=0&mn=6&dy=0&i=p16684673539&a=294676378&r=632.png

....and the following (US Dollar, VIX, VXN, BONDS, TRIN, TRINQ) which in a continuing uptrend would be confirming by making new lows:

https://stockcharts.com/c-sc/sc?s=$INDU&p=D&yr=0&mn=6&dy=0&i=p66853630221&a=294679861&r=21.png

[Rogerdodger]

Good stuff as usual Don.

"Behind these major movements is an irresistible force. Most of all, do not try to combat it." J.L. Livermore -



"It will probably be messy."

Edited by Rogerdodger, 03 March 2013 - 12:41 PM.

[Echo]

Nice Don,

Always good to look both ways before crossing the street or biasing long vs short.
No question there has been a dent in the internals, but the NYAD has not even been able to break the 19 day ema yet, just bounce off of it. So no signal for breakdown or the May 2010 drop yet so far.
This study on 10:1 UP and DOWN volume days over the past year might be instructive going forward on either confirming your stance or a good place to accept non-confirmation of a top and a possible move higher perhaps to challenge the old ATHs on SPX before correcting again. Just a quick thing I drew up this morning that caught my eye after RD posted on the twin 10:1 down vol days in another thread.

10:1 Volume days

Doc

https://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=1&mn=3&dy=0&i=p70343230267&a=116322972&r=1362335045478.png

[Rogerdodger]

"a good place to accept non-confirmation of a top and a possible move higher perhaps to challenge the old ATHs on SPX before correcting again"

A good tactical move would be a breakout followed by a breakdown.
Of course we already got the breakout on the most watched DOW 30, and nobody's home.
But it sure seems that sentiment should be much higher for that tactical move to be effective.
As noted at Sentimentrader.com :

February 28, 2013
The volatility stocks have undergone during the past week has flushed out a large number of bulls among individual investors.
They've fled to one of the largest degrees ever during a positive market.

Can that many individual investors be correct?
Doesn't that mean that they have already sold?


http://stockcharts.com/c-sc/sc?s=$INDU&p=D&yr=3&mn=0&dy=0&i=p52071858590&r=1362336907030.png Note the UGLY Feb. RSI divergence!

Edited by Rogerdodger, 03 March 2013 - 02:34 PM.

[Echo]

As noted at Sentimentrader.com :

Chart is awful small, but aren't we about where we were sentiment wise back in April last year?

[Rogerdodger]

Chart is awful small, but aren't we about where we were sentiment wise back in April last year?

I can't see the small chart too well either.
I think they want you to subscribe to see it.

Except for NAAIM, they looked fairly close until AAII & Tickersense dropped off recently.
I think Tickersense will post the public results tomorrow.

I'm just thinking about this: "They've fled to one of the largest degrees ever during a positive market."
What if they jump back in?

Here's a side by side comparison with the April 2012 top:



My concern has to do with an apparent government plan of using another crisis (i.e. a market sell-off) to push through even more "emergency" spending and taxation.
But that could come after new highs are celebrated, then worry (and blame) resumes nearing another political cliff.

"With tax cuts expiring, the sequester in place ... It will probably be messy. It won't be pleasant."

Edited by Rogerdodger, 03 March 2013 - 06:11 PM.

[tomterrific14]

Chart is awful small, but aren't we about where we were sentiment wise back in April last year?

I can't see the small chart too well either.
I think they want you to subscribe to see it.

Except for NAAIM, they looked fairly close until AAII & Tickersense dropped off recently.
I think Tickersense will post the public results tomorrow.

I'm just thinking about this: "They've fled to one of the largest degrees ever during a positive market."
What if they jump back in?

Here's a side by side comparison with the April 2012 top:



My concern has to do with an apparent government plan of using another crisis (i.e. a market sell-off) to push through even more "emergency" spending and taxation.
But that could come after new highs are celebrated, then worry (and blame) resumes nearing another political cliff.

"I'm just thinking about this: "They've fled to one of the largest degrees ever during a positive market."
What if they jump back in?"

http://www.zerohedge...130301_indu.jpg

What "they" are saying in opinion polls, sometimes can be different to what "they" are actually doing with their money..or am I mixing apples with oranges.?

In looking at the April 2012 period on the above chart, the margin buying crowd wasn't as historically bulled up as they are now.

Confirming this is the 2 month long period of leveraged long positions in the NAAIM Survey of between 160% and 200 %. http://www.naaim.org...ager-sentiment/ Or am I reading too much into the belief that everbody is already in the pool. ?

Sentiment in the recent p/c ratio (1.17 on Friday) seems to suggest that the market is not yet ripe for an immediate selloff, which is in agreement with your interpretation of current sentiment that could fuel a further rally. Still one wonders how far the market can advance if they jump back in.....



"With tax cuts expiring, the sequester in place ... It will probably be messy. It won't be pleasant."

[nimblebear]

.....IYB, Joining the chorus of hundreds prognosticating with very believable stories, this could be the BIG one.

Some pretty compelling stories, with a wide variety of reasons and perspectives (all confirming the charts ?) :

1) BOFA http://www.businessi...-bearish-2013-3

2) Zimmerman : http://www.businessi...l-crisis-2013-2

3) Dilbert : http://www.businessi...-markets-2013-3

4) Google Trends: http://www.businessi...nvesting-2013-3

5) Doug Short : http://www.businessi...tracting-2013-3

6) Global PMI reports: http://www.businessi...obal-pmi-2013-2

7) Marteson: http://www.businessi...o-crater-2013-2

8) Kansas City Fed : http://www.businessi...comments-2013-2

9) Pragmatic Capitalism : http://www.businessi...nce-2000-2013-2

10) Fade of the Decade : Rosenberg Now Turns Bullish http://www.businessi...ndicator-2013-2

(after he's been bearish for 4 years during the entire run up) Classic !

11) Multiple Pro's say "crash" : http://www.businessi...et-crash-2013-2


and so forth.

Which taken altogether probably means an extremely protracted and "painful" long rounding top.

[jmicou]

<br />Some may remember our <a href="http://sevensentinel...eekly-analysis" target="_blank">article of October 7, 2012</a> about the universal failure of all broader averages and all market internals to confirm the closing high of the DJIA on October 5, 2012 and our suggestion that external (market prices) would follow internal (broad averages, breadth, high/lows, etc) lower:<br /><br /><img src="https://stockcharts.com/c-sc/sc?s=$NYMO&amp;p=D&amp;st=2012-09-03&amp;en=2012-11-16&amp;i=p79372172532&amp;a=293790451&amp;r=9220.png" border="0" class="linked-image" /><br /><br />The set of charts we've displayed below should serve to show a wide sampling of the massive and comprehensive &quot;universal failure&quot; of market internals to confirm last week's highs in the DJIA. The October 7th report also displayed the failures in the moving average of net advances and net new highs as well as the percentage of stocks (of various indices) over their 200, 50 and 20-day moving averages, various foreign stock indices, NYMO, NAMO, NYSI, NASI, as well as various Intermediate Term Indicators from Decision Point. We could display those here, but will spare the reader the trouble of reviewing all of those by simply saying that once again....ALL of those have failed to confirm. This failure is even more universal and deeper on individual charts than the October 5, 2012 universal failure.<br /><br />Following that decline from October 5, we had the decline shown above - followed by a Seven Sentinels Buy Signal on November 23 and another IT uptrend..... but here we are again five months later. If October 5 was Universal Failure, March 1 was Universal Failure II. Good trading all, D<br /><br /><img src="https://stockcharts.com/c-sc/sc?s=$NDX&amp;p=D&amp;yr=0&amp;mn=6&amp;dy=0&amp;i=p60369313233&amp;a=294643499&amp;r=533.png" border="0" class="linked-image" /><br /><img src="https://stockcharts.com/c-sc/sc?s=$INDU&amp;p=D&amp;yr=0&amp;mn=6&amp;dy=0&amp;i=p16684673539&amp;a=294676378&amp;r=632.png" border="0" class="linked-image" /><br /><br /><b>....and the following (US Dollar, VIX, VXN, BONDS, TRIN, TRINQ) which in a continuing uptrend would be confirming by making new lows:</b><br /><br /><img src="https://stockcharts.com/c-sc/sc?s=$INDU&amp;p=D&amp;yr=0&amp;mn=6&amp;dy=0&amp;i=p66853630221&amp;a=294679861&amp;r=21.png" border="0" class="linked-image" /><br />

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