O/S Breadth is zoned...

The banks did it again, it seems, the deflation is also back from the commodities side, it also seems. The growth held up, the breadth fell apart. So, now in July this is where the next impulse came in from a very similar setup... It actually dropped a little more in July to 20 dma or so as I remember, but we had a pretty o/s a/d today at the close. So, you don't want to be riding on this long, if it will be trending lower from here... I do not think the market will make too much higher in the weeks ahead, if the market does not rally here, probably a trading range of some sort, but it spells big trouble for December and on. Not that I was very bullish for the second half of December anyway, but Ms Market has her ways... Not outright turning bearish before we see the action for tomorrow, then I will look to trade a range, I think the upside will be getting quite limited once we approach 1130-1140. It is still pretty early in my work to turn outright bearish since it is only 9 days into this dominant cycle that worked for many many months and you would expect at least one last major rally attempt higher --and the place is actually right now... I am holding longs for a gap up and run, average price around here for today's purchases 1086-1087, I keep positions from lower positions before Monday's blast higher and I will be stopped out at 1082, very firm. Best of luck. PS. Mr Bernanke; if you are reading this, please bail me out with some decent gains above 1100 at least so that I can at least save my reputation.

BTW, the breadth chart I posted here is doing what I thought it would do, it really needs to not fail here.

Arb, if you get stuck with toxic assets, there's an app for that.

Arbman, other than the 10/26 selloff, every other lopsided AD volume reading (vertical lines) resulted in a decent snapback....this is using a 10min chart. Daily chart is more concerning..... Also, the program trading 'tape painting' signature looks much like the 10/20 selloff, which based for a bit before blasting upward to back-kiss the broken channel ~110 SPY currently. One other thought I had is that if the primary trend were to turn down around here, it wouldn't mess with your head this time around and chop in the 1090-1100 area....it would just immediately reverse below that area and stay there (and lower).....and so far that's what we have. And one last note....how you ever seen sooooo many lopsided breadth and AD volume readings in such a short time.....guess it's HFT that's changing the game....but that's a whole 'nother conversation

Gokhan, just curious about your cycles. Do you also track foreign markets, especially emerging markets and currencies? Those cycles appear to be topping....wonder if the currency effect is interfering with your cycle work? Have you ever tried do cycle analysis by adjusted the SPX into real terms (adjusted for the appreciation or devaluation of the USD)?

I track anything that can be tracked globally. Yes, everything in USD dominated. But I look mostly whether they are liquid enough first, something that trades does not mean it has enough significance or influence statistically that we should spend the time to compute etc... I track what is leading or lagging using my own cycle-trend transformations...

Edited by arbman, 12 November 2009 - 10:09 PM.

it is not USD "dominated", denominated... Actually mostly USD denominated assets dominate the forecasts...

The new highs and breadth are lagging, but the next blast higher, if it is already on the way tonight, MAY change that very dramatically into next week... Not a new bull market, but it will most likely force the bears to cover for sometime... R1 is gone at this point tonight on ESZ9, R2 is next around 1092, an open above 1094 tomorrow will get the bears very uncomfortable. I think we will open over 1098 honestly for clear sailing and the market will not hick up around 1100 once again, but I will believe it when I see it, I am already long...

Arb, if you get stuck with toxic assets, there's an app for that.

ROFL!

I didn't get what I wanted (a strong blast), most bears didn't get at all what they wanted, so far hanging on moving the stops to 1089 or a little better than break even, tons of short selling at these prices, I think the market will chew through the supply and climb higher till the close... What a wall of China of worry... In my opinion the trend remains up, not free money at all for sure though, especially for the faint hearted...

Edited by arbman, 13 November 2009 - 11:53 AM.