Is it Time....?

Here's the reason I had said "No- not by my measures" in answer to that question in an earlier post, as I was extrapolating the close today. NYMO is actually running AHEAD of SPX, indicating internals are not even beginning to give us any benchmark lows from which we can project a price low days or weeks down the road somewhere. Instead they are collapsing. Breadth is compressing faster than anytime I can remember. NYMO is at a multi-year low on today's close. Please DON"T be fooled into thinking that's a GOOD thing - because it most definitely is NOT. Just look over the last decade or two at the days when NYMO hit it's extreme low points and then look at the markets that FOLLOWED that low point, and you will see what I mean. One recent example at bottom of post. But go back and look at several more to see what I'm talking about.

It's a remarkable market. As Dev often says, Trade safe, D

Not by my measures. We'll have to see the NYMO numbers tonight first, but so far I don't see what I'd like to see for any kind of a bottom, short term counter trend rallies notwithstanding. The problem? NYMO is likely confirming what looks to be closing lows for today (save a sharp reversal), so that we don't have even the beginnings of a divergent set up....yet. But the close is still several hours away, and in today's market, that can seem like an eternity.

http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=0&mn=4&dy=0&i=p65219002526&a=183933418&r=645.png

http://stockcharts.com/c-sc/sc?s=$NYMO&p=D&yr=0&mn=4&dy=0&i=p26815617202&a=199263752&r=143.png\

Just my thoughts. Good trading, D

Very astute comments Don, thank you.

Yes, I just looked at my data (Stockcharts has now updated)...staggering! Now, the Vol Oscillator (like $NYMO but using volume) is showing positive divergence...it's very rare to see one showing positive divergence and another not.

This sell off looks very similar to the October 2008 move as compared to momentum, IT charts and the VIX. The bottom hit there when VIX reached 80 and even then it was turbulent at best.

vix is scary as it has reached oct 08 level where this can keep selling....950 was a base where the rally took off in july... just to scare...

Great work, thx!

Yeah, Don. Good stuff.

Because TL's Vol Osc is showing positive divergence, and $NYMO is showing negative divergence, I'd be careful here on what type of mindset to have. I have seen this on one other occasion and TL's Vol Osc was more reliable, from what I can remember *my memory isn't great, though* ...normally this isn't an issue because both match up pretty closely. For me, my trading strategy ensures I miss the bottom but gets me in once a bottom is established, just as I miss the top but get short once a top is established (I don't always short...sometimes prefer to go to cash, as I did in this latest April top). I'll freely admit that I'm a trend follower and not trying to catch exact tops and bottoms.

Edited by Sharpe Trader, 20 May 2010 - 08:21 PM.