173 replies to this topic

[diogenes227]

And finally a glance as the SPX/UPRO. This run from late August -- including the Sept. 1 NYSI buy -- has been...shall we say "simply" wonderful?

Anyone want to measure a possible inverse head and shoulder there? Be my guest. A snap back to the breakout line would be nice to relieve the overbought tension before moving on. In the meantime, I'm just going to try to keep trudging along the carnival midway in McClellan land.

http://stockcharts.c...5394&r=7739.png

[diogenes227]

Had a discussion of back tests using the NYSI signal today on the FF board. Including it here so I know where it is.

CONTEXT, CONTEXT, CONTEXT

[diogenes227]

NYSI sell today.

TNA finished this NYSI swing from September 1 up nearly 12 percent (11.98 ). At its peak close three days ago it was up 22 percent. Might want to take a look at the "CONTEXT, CONTEXT, CONTEXT" link immediately above for a discussion of the the selling using the NYMO to beat the NYSI lag during this period. Still, twelve percent in 14 trading days is not so terrible.

As noted in the posts above this sell off is typical in the third or fourth week of a typical McClellan cycle and here it is right on time. Now the question is -- is this a typical McClellan cycle? If it is, don't be surprised to see the market come screaming out of here to the upside in the next day or two (another monster Monday?).

But for now, a sell is a sell is a sell. Once again, the context is bearish until is isn't.

Good trading to everyone.

http://stockcharts.c...1656&r=1618.png

[diogenes227]

NYSI turned up again Friday giving a buy. A one day whip-saw, and a brutal one at that -- if you went short via TZA on Thursday's close, the loss on Friday's close was more than 9.5 percent. If you have a stop regimen intra-day, it would be less but no doubt still painful given the gap up in the Russell and other indexes. However, this one day dip now look like a "hook" on the NYSI and hooks usually mean acceleration in the direction of the previous trend -- in this case, up. I say "usually", not "always", so we'll see how it goes. I'm always leery of trying to explain any psychology in the market (just follow the signals, dummy!), but if there is one for this hook phenomenon, it might go something like this: shorts in the market or buyers on the sidelines, caught by a surprise rally in the historically worst month of the year and left behind by a nine-day run in the Nasdaq, were just waiting (praying?) for a pullback they could buy/cover and when they got it, they bought/covered it like crazy. Now we'll have to see how many more buyers there are or shorts still to be squeezed. For now, the context is bullish until it isn't...

[diogenes227]

More discussion from Fearless Forecasters board Friday.

It appears those guys just don't want to believe.

MONSTER FRIDAY

Keep on swinging.

[inamosa]

Thanks diogenes for all your work on this board. By the way, I have never understood the need to short in uptrends or go long in downtrends. People can hedge if they want but doing more than that during brief interruptions in the trend makes no sense to me.

[manuj]

Dio How to monitor $NYSI in real time? StockCharts.com only updates it at EOD. Thanks Manuj

[diogenes227]

Dio

How to monitor $NYSI in real time? StockCharts.com only updates it at EOD.


Thanks
Manuj

I do it in Trade Station but it can be done manually by setting up the formula in Excel, importing enough data to make the formula current, and manually entering the advances and declines during the day when you need to have a real time reading.

[diogenes227]

NYSI gave a sell on Friday by 1 point in StockCharts, 11 points on TradeStation. TNA is up 6.4 percent on the last little run in the NYSI from Oct. 5th, and up 41 percent since this NYSI swing first began on Sep 1. There were a couple of frustrating whipsaws along the way (not confirmed by the NASI by the way, which held steady throughout this run and as of now is not near a sell). AAPL earnings Monday might manage another market whipsaw but this rally appears to be getting weary. Given the NYSI down tick Friday and the sluggishness in several of the rally's early winners (like NFLX) and the sell offs in the financials the last couple of days, and the length of the rally (36 days, which often is the entry window for a decline), it appears the context is now bearish, which means be in cash, or short, or prepared to sell bounces, whatever one's personal trading style. At least for now.

[diogenes227]

NYSI gave a sell on Friday by 1 point in StockCharts, 11 points on TradeStation. TNA is up 6.4 percent on the last little run in the NYSI from Oct. 5th, and up 41 percent since this NYSI swing first began on Sep 1. There were a couple of frustrating whipsaws along the way (not confirmed by the NASI by the way, which held steady throughout this run and as of now is not near a sell).

AAPL earnings Monday might manage another market whipsaw but this rally appears to be getting weary. Given the NYSI down tick Friday and the sluggishness in several of the rally's early winners (like NFLX) and the sell offs in the financials the last couple of days, and the length of the rally (36 days, which often is the entry window for a decline), it appears the context is now bearish, which means be in cash, or short, or prepared to sell bounces, whatever one's personal trading style. At least for now.

AAPL did as expected -- or I should say the AAPL earnings expectations did the trick -- and popped the NYSI up one more day to put in the usual high below a high on the NYMO and down we've gone. I talk a lot here about context. With AAPL up ten consecutive days into yesterday's close and their earnings announcement it wasn't all that hard to tell that it was going to be a "sell the news". They could have announced they had put Microsoft and Google out of business and they'd still would have sold off.

Anyway, when the chart below updates after the close it will show the high below the high on the NYMO, the NYSI giving another sell signal and the NASI finally in agreement with the NYSI. So as noted over the weekend, the context is bearish and even more so now. Given it hard and fast we have dropped today, it would be no surprise it there's a bounce, but that's one way to play the decline -- by selling the bounces.

Good trading to everyone.

http://stockcharts.c...7277&r=4626.png