DOWNSIDE BREAKOUT

From last Wednesday and Thursday, 7/18 & 7/19...

I've just plugged in some of the preliminary data. If it only moves sideways or down tomorrow and Friday, my system indicates this is likely to go straight down.

So, the SPX closed above 7/3/12 high today. However, this 3.73-point advance today didn't do enough to confirm the breakout. Like I commented yesterday, it's got one more shot tomorrow. If there's no follow through tomorrow, then this would be considered a fake-out.

And, the market went down on Friday to complete the Evening Star reversal pattern (blue circle), which was followed by a gap-down on Monday plus a down Tuesday on rising volume to confirm not only the short-term Evening Star reversal but also the longer term Bear Flag (Wedge) pattern breakout.

Sometimes all we need is price and volume.





And, since the SPX 7/19/12 breakout is now considered a fakeout, we're still operating under both the 7/3/12 IT top and the 3/19/12 major top that I had called previously. Any post breakout pullback is deemed great opportunity to short.

much attention is paid to the cumulative NYAD...recently discovered that cumulative NYUD & NAUD more closely 'track' the indices...NYAD was hitting all time highs but NYUD & NAUD were not confirming...

Nice chart. I nevertheless pay very little attention to the NYAD anyway, per my previous heated debates with other members on this forum.

Among many many other things, this rally off June 4 low also hasn't been confirmed by the Transports.





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BTW, here's a little numerology fun. The Dow lost 101.11 yesterday. 10111 is a prime number. The 10111th prime number is 106087. The Dow at 10608.7 level would take us back to last Aug-Sep post S&P downgrade lows.

Mystery of the Universe...

We have (1) Net foreign purchases of U.S. stocks in decline since the last round of LTRO, and (2) I've outlined evidence indicating source of liquidity in last week's super duper NDX rally is likely domestic. But, our individual and Institutional investors continue to stay risk averse while short interests have been declining since December.

So, what gives, I mean, who gives?





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Meanwhile, it looks like the Euro is running into a pretty solid resistance at 1.2150.

Good day and good luck, boyz.

Edited by TechMan, 25 July 2012 - 08:14 AM.

Fantastic work. I have been eyeing the transports very closely. They have been lagging the Dow for awhile now. It reminds me of when they started to lag earlier in the year. They were lagging substantially larger earlier, but I expect the same result as far as the direction of the move.

Among many many other things, this rally off June 4 low also hasn't been confirmed by the Transports.

True they have lagged. Note though, there was a TDSEQ buy signal countdown 13 completion on the daily chart yesterday at the close on the Transports. Probably good for at least a little pivot low.

And, the Nasdaq Transports look even worse.

If these were the only "Unfair & Unbalanced" attributes of the current state of the market...