June 20 Sell

Follow up to the Summer Solstice Sell Signal. Here are hourly charts from now and equivalent period in 2010:

http://stockcharts.com/c-sc/sc?s=$TRIN&p=60&yr=0&mn=1&dy=0&i=p75048732541&a=267020840&r=6559.png

Here was equivalent retrace to 13-day ema after signal in June 2010:

http://stockcharts.com/c-sc/sc?s=$TRIN&p=60&st=2010-05-28&en=2010-06-29&i=p62965007081&a=269656601&r=3028.png

It has been said that markets do not repeat but that they do rhyme from time to time, and this market is rhyming with June 2010 in a rather remarkable way. We've made reference to this before, but this rally looks just about exactly like the early June 2010 rally off that bottom, which subsequently peaked on Summer Solstice - which was June 21, 2010. Here is what that looked like:

http://stockcharts.com/c-sc/sc?s=$NYMO&p=D&st=2010-03-01&en=2010-07-01&i=p45962201791&a=219265881&r=1340242269177.png

Now let's look at the recent rally off of the recent early June 2012 low, as internals including the our Hourly Trend Trackers and Seven Sentinels have tracked nearly identicaly - and we look to have again peaked on Summer Solstice today:

http://stockcharts.com/c-sc/sc?s=$NYMO&p=D&yr=0&mn=5&dy=0&i=p92020892343&a=225433288&r=298.png

Good weekend all, D

Thanks, good to see. I use price and volume and come up with some of the same trends. Generally down, but first 13000 Dow and Comp to 2900 before the major correction is shortable. I suspect 1230 and 1070 are possible in SP5. Later summer and fall. Suspect the dollar moves up to 89 and gold down hard to 1430 or lower but a buy low in all cases. The oil was on a good track to 67 but maybe the shoot down of Turkish plane over rides and oil goes up for a time. Then the Fiscal Cliff looms. Maybe EU gets messy, these may drive bonds much higher 150 or 160. Then sell them and go Emerg Markets maybe. Best, Islander.

Edited by Islander, 22 June 2012 - 08:49 PM.

Couple of comments if I may. First, great analysis and way to go out on a limb. There are couple of other really good posts written overnight and I can only say that this board is amazing sometimes. I think there are couple of significant differences. One that 2010 thrust was preceded by very low breadth levels. The price had to be sucked back down. Laundry talked about this on few occasions. Second is price. Notice that in 2010 price already broke the support while Friday we bounced off of it. Looked at few other things and they reaffirm your stance but I think it's a bit early to make that call due to price. Once support goes....

Excellent points rm, especially about the negative breath "sucking price down to new lows." Actually, this chart shows that while you are technically correct about breadth being more negative in May/June 2010, the difference is almost negligible. The arrows are pointing to the lows of 10-day net advances at the late May lows in each period:

http://stockcharts.com/c-sc/sc?s=$NYA&p=D&yr=2&mn=6&dy=0&i=p00812684971&a=230013759&r=1340464756221.png

Also, the 2010 initial decline did find some support {as shown here} before bouncing on June 22 - though I take your point. Thanks....

http://stockcharts.com/c-sc/sc?s=$VIX&p=60&st=2010-05-31&en=2010-07-01&i=p99215800630&a=269656603&r=1340464968364.png

Btw, for the record, 8-day ema of trin in EACH example in the first post reached 2.21 on the first thrust down, and then bounced to 1.26 where it closed Friday on the return to the 13-hour ema of price...before, as on June 23, 2010 and presumably on Monday..... continuing the sharp sell-off......

Edited by IYB, 23 June 2012 - 10:44 AM.

Couple of comments if I may. First, great analysis and way to go out on a limb. There are couple of other really good posts written overnight and I can only say that this board is amazing sometimes.

I think there are couple of significant differences. One that 2010 thrust was preceded by very low breadth levels. The price had to be sucked back down. Laundry talked about this on few occasions. Second is price. Notice that in 2010 price already broke the support while Friday we bounced off of it.

Looked at few other things and they reaffirm your stance but I think it's a bit early to make that call due to price. Once support goes....

If I can participate in this thread:

The flash crash in 2010, the august 1st week crash of 2011 weighed upon the stock market for the next 3 months in form of breadth, moving averages and what not. The markets don't just go up just like that from those crash events. I have noted this last year also (CLK should remember this). I have told that the markets will be range bound till Jan 2012, which is exactly what happened.

Now, I don't see any crash from the past hanging upon the market. Sure the ~ correction that we had for the past 3 months will make this market slow and range bound. But, to expect what happened in 2010/ 2011 to repeat is only rear mirror fantasy. Just IMHO FWIW.

Anything can happen but that's the difference of 2012 from 2010 and 2011.

IYB, forgive my lack of clarity sometimes. English is my second language and I can only wish to be eloquent and precise as some of you here are.

When I said breadth, I was thinking more in terms of volume breadth than issues breadth. And if you take a look at former, the differences are significant.

Take a look at the pic below. First McClellan is issue based and the bottom one is volume. Take a look at the bottoming levels on the volume oscillator for those two time points. 2010 was a massive dump.



Again, you have tremendous number of similarities going in your favor and I have just mentioned few that do not fully rime.

Your English is more than sufficiently eloquent rm- would never have guessed it to be your second language. I looked at the volume McO's on Decision Point and can see clearly the distinction you are making- and your point is well taken. Tried to post those DP McO's here but couldn't get them to copy properly.

But nonetheless - while the degree of negative volume breadth was less in May 2012 than in May 2010, about -130 versus -152, I believe that the concept- and what it means for price immediately ahead, is valid. Of course, I have additional evidence of this in the form of my Hourly Trend Trackers- which are essentially the hourly equivalent of my daily Seven Sentinels, having gone to sell on Thursday.

http://stockcharts.com/c-sc/sc?s=$NYMO&p=D&yr=0&mn=5&dy=0&i=p54650629980&a=267819034&r=716.png

It's an interesting comparison. I appreciate the creativity, diligence and willingness to share, Don. Thx.

Out of curiousity, I called up the same 60 min bar time frames in $SPX. Below are 60 min charts of from June 2012 and June 2010.

The biggest difference so far is that the initial downthrust has already printed a TDSEQ buy set up (black 9 on the chart below the bars) and the low of that set up has NOT exceeded the range of the immediate prior TDSEQ sell set up (black 9 above the bars, starts at the black 1), while on the June 2010 chart the low of the 9 of the TDSEQ buy set up (black 9) exceeded the immediate prior TDSEQ sell set up by a substantial margin, which ordinarily suggests that a full countdown will play out..

Finally, note the differences in the volume oscillators at the bottom..


[Also note how the the TDSEQ countdown counts (purple and red 1 thru 13's) at the 13' ID either the tops or a relatively low risk entry points] in both charts].


2010 60 min chart


2012 60 min chart

Edited by Geomean, 23 June 2012 - 05:47 PM.

It is very interesting that this looks just like June 2010. We'll find out pretty soon if we get a semi retest of the lows by late next wk or turn around Tues July 3rd. Plenty of room to work higher on the wkly charts if and when this retest pans out. Plus we even have Goldman on our side.. The S&P 500 index had a doji close yesterday which generally marks the top and Goldman Sachs bear call recommending a short position in the S&P 500 index with a target of 1280 and you get a broad market sell off.

IYB, Have to say that was a good call. I don't put a lot of weight on markets repeating the same way as a past date in time, markets are usually too random to be right enough times, but you have done better than most at it. Whether it follows through on down into a 5th of 4 or a truncated 5th, who knows ? Nothing really garranteeing anything at this point, more of a hope setup than anything, I don't like this point in time after the initial drop.