Slowly We Turn...Step By Step

Until we finally have a close encounter with the 1st weekly MACD bullish crossover in a long, long time. Weekly Mackie-D's play a very important role in the decisions of a lot of stock speculators. Many won't take a fully loaded position until they see a weekly crossover. I posted $SPX below, but the same MACD pattern exists on all the indices. A couple of good trading days and we will get the 1st weekly buy signal since April. (August was a headfake) (1 chart)

U.F.O.

Hello U. F. O.,

My long-term chart suggests we are almost clear for an intermediate-term up trend. See below.

http://stockcharts.com/c-sc/sc?s=$SPX&p=M&st=1980-11-05&i=p30212307617&a=154526719&r=7925.png

Nice work frenchie. We're on the same page. Best. U.F.O.

Snippets from...article by

When Can We Expect A Sustainable Price Move?
by Guy Lerner

Identifying the market bottom is hard enough even after the fact. On the other hand, being "in" at the bottom does have its benefits, and it is likely to result in significant market outperformance.

I will assume that a sustainable price move starts when prices cross their 200 day moving average. All I am saying is that at some point in a bull market prices will cross the 200 day moving average and stay above this level for a long time.

Let's assume (as I believe), the market trades in a range as defined by the price swings of the last two months. The average price on the S&P500 since November 3, 2008 has been 879.6. (1007.51 high and the low 741.02). For the forseeable future the S&P500 were to close at the average price (i.e., 879.6) seen over the last two months, it would take 163 trading days for prices to close above their 200 day moving average.

If prices were to stay within their current price range, it will take almost 8 months for prices on the S&P500 to be above their 200 day moving average. In essence, it is going to take time before a new bull market rally is upon us.
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My take on this is, going long at the bottom point of range significantly enhances performance further.

Edited by pdx5, 27 December 2008 - 03:27 PM.

I'm sure Guy is a lot smarter guy than we are...but the 200 day sma on $SPX comes in right here at 1,190. I know he's not proposing one should sit on their wallets for the next 300+ S&P points, but for most here a "sustainable" bullish move isn't necessary for our trading style. I'll take highly volatile swing trades of 1-2 weeks duration every day and twice on Sunday. U.F.O.

Good Morning, guys. The ADX/MDI relationship has been a tough one for me to really understand for timing purposes. The extreme in the monthly chart - MDI rolling over from above 40, and still well above a rising ADX - is one that I backtested on my databases. I track 100 stocks (high volume option stocks), and have daily data back to '85. The extreme case we've got only shows up (no surprise) for the current timeframe - we're in a historical period for my backtest capabilities. So I stepped down to a weekly timeframe, just to get a candle count on bottoms: ADX 14 & MDI 14 BACKTEST SETUP: MDI (14) TURNED LOWER FROM OVER 40 ADX (14) ABOVE 30 & RISING MDI (14) IS AT LEAST 5 POINTS ABOVE ADX 14 RUN ON WEEKLY CANDLES, NOT ENOUGH HISTORY FOR MONTHLY CANDLES STOCK DATE NO. BARS BEFORE SIGNAL BAR HIGH IS CROSSED XOM 10/30/1987 16 this 10/30/1987 6 SLB 10/30/1987 15 IBM 10/30/1987 10 JNJ 11/20/1987 3 T 12/11/1987 1 CAT 8/31/1990 14 DE 8/31/1990 100 MORE OR LESS DE 10/5/1990 14 BAC 10/15/1990 5 MO 4/8/1993 4 FCX 12/26/1997 6 IBM 5/20/2005 7 CMCSA 10/17/2008 10 AND COUNTING OIH 10/17/2008 10 AND COUNTING CHK 10/17/2008 4 CX 10/17/2008 8 USO 10/31/2008 8 AND COUNTING Remember these are weekly candles. This seems to say that reversing from this strong a down-trend takes several candles. What I see as I look at these charts is that the first bar after such a signal has a better than 50% chance of a spike high in the 1st candle (didn't happen this month), then an "ending diagonal" for about 1/2 the candle range shown, then a slow (relative to the fall) recovery from that. The spike high of the signal candle seems to present significant resistance to higher prices. I've got that signal in November for DIA, SPY, and EFA. I know it's all about timeframe, but this tells me that (1) "the worst of it" is over; (2) we will test, and probably beat, the 740 lows, and that (3) it's not realistic to expect a bottom for another 2-4 (candles) months.