Let the decline begin...

It's about time for the market to pull back.

That's my master chart below and it can also always be found HERE. Those blue "66 days" lines are sitting on there all the time. That's the neighborhood for a bottom to bottom, give or take a few days. Today was the 66th day. Given that the indexes and their ETFs haven't even started to go down, this decline is now overdue. The NYSI hasn't turned down yet (but we all know the NYSI LAGS...) The NYMO is chopping sideways with above the zero line with no distinct high below a high and actually has a couple little lows above lows (gulp!). The NYMO, however (as is being argued elsewhere on this board), turned down today. Hardly any damage in the various VIXs. But there are a fair number of dojis and near dojis scattered around the indexes and etfs, and a goodly number of "Sell-If" cropping up on American Bulls, and most of the bullish percent indices on Stockchart have nosebleeds.

And I've been pushed out of my sector plays by the stock action, and my nifty-fifty generally look more like the sickly-fifty at the moment. I still have some TNA and a bunch of stocks I have on a bottom-picking scalping system but I'd stop them out now on any sign of continued weakness, (and actually I'd buy back on any sign of continued strength).

But, at the moment, I'd rather see a cascade begin. I'd like to see the bears get a break or at least a breakeven. In fact I'd like to see a drop that get the bears dancing around the honey comb, growling "I told you so, I told so, I TOLD YOU SO!" I'd like to see a plunge enough to turn the bulls pale...

I'd like to see that right now because a correction like that would make this bull market a whole lot easier to trade -- oversold, cleaned out, with a renewed NYMO/NYSI complex bottom, we'd have a nice screaming summer rally until (depending on how long the drop takes) maybe the Fourth of July. And that will be the time when the real money is once again made.

If we don't get anything like that, if that little dip back in mid-January was all the downside she wrote (see the "gulp" above), this is probably going to be scary every day flying high to the sky. If that's was it, the only decline this bull is allowing, it's all going to be a white-knuckle long until the NYMO finally puts in a definitive high below a high and/or the NYSI falls.

I guess we'll see next week, or maybe later... Good luck and tight stops to everyone. And have a nice holiday.

http://stockcharts.c...1656&r=9052.PNG

Nice chart, thanks for sharing...

I just lurk these days but wanted to thank you for your posts. The info you have provided to look at McClellan data has been quite excellent. Thanks. -Jim

It's about time for the market to pull back.

Those blue "66 days" lines are sitting on there all the time. That's the neighborhood for a bottom to bottom, give or take a few days. Today was the 66th day. Given that the indexes and their ETFs haven't even started to go down, this decline is now overdue.

And on the 67th day...

I guess when it's time, it's TIME! I've said before that 66 days is from bottom to bottom (give or take a few days) and I would be looking for a momentum or a divergent low in that time frame. Wouldn't you know it? Don't have either. Yet. Probably because the decline was overdue. Just a one day drop.

The NYSI did go negative (and about time!), so the context is to be short or in cash (I am in cash).

And I can see the bears are already dancing -- BEARS DANCING.

But the question is have the bulls turned pale? I don't think so. Not yet.

So what to look for? I'll tell you what I'd like to see. I'd like to see the bears tear out the low on the NYMO back in January, and set up a deeply oversold condition; then I'd like to see a small rally, and finally another pullback to set a divergent low above a low in place on the NYMO, followed an upturn in the NYSI to get the summer rally really rolling. That's pretty much what is going to happen again (as in the market does this again and again and again), but how long is it going to take? Three weeks would be fine with me. Even five weeks.

The danger here for the bears is today was a typical "buy spike" off that January low and the whole process takes two or three days instead of weeks.

Good trading to everyone -- I was going to say "good luck to everyone" but we know what luck is (see below).

nice and timely post. doc

It's about time for the market to pull back.

Those blue "66 days" lines are sitting on there all the time. That's the neighborhood for a bottom to bottom, give or take a few days. Today was the 66th day. Given that the indexes and their ETFs haven't even started to go down, this decline is now overdue.

And on the 67th day...

... the question is have the bulls turned pale? I don't think so. Not yet.

So what to look for? I'll tell you what I'd like to see. I'd like to see the bears tear out the low on the NYMO back in January, and set up a deeply oversold condition; then I'd like to see a small rally, and finally another pullback to set a divergent low above a low in place on the NYMO, followed an upturn in the NYSI to get the summer rally really rolling. That's pretty much what is going to happen again (as in the market does this again and again and again), but how long is it going to take? Three weeks would be fine with me. Even five weeks.

The danger here for the bears is today was a typical "buy spike" off that January low and the whole process takes two or three days instead of weeks.

Good trading to everyone -- I was going to say "good luck to everyone" but we know what luck is (see below).

Just updating last week's post. We've had the 66-days (give or a take a few days) drop. As said above I'd like to see more downside and for a longer time period. But I think it must be the bears again getting the blues on this snap back from deeply oversold. Managed to pick up 8 plus percent on a small TNA position (I am in cash again thank you very much).

So what to look for this next week? Pretty much the same as above. This bounce this week has taken the NYMO back up toward the zero line. A rollover next week could either take out Tuesday's low (which I'd prefer just so we get a safer, easier to trade rally afterward), or we could get a low above a low on the NYMO which would likely mean the bears worst nightmare is becoming a bull dream and we go to new highs and beyond...

It's all fear, greed and time, and the NYMO/NYSI has always been a fairly reliable clock, but now it's showing its dependability as a road map to the markets moves too.

Have a good weekend.