173 replies to this topic

[diogenes227]

Speaking of divergences...takes a while for them to mean anything but when they do they mean a lot...

Taking note of the bouncing balls on the NYSI:

http://stockcharts.com/c-sc/sc?s=$SPX&p=D&st=2006-10-10&en=(today)&i=p78746276986&a=163053784&r=4564.png

[inamosa]

Hi diogenes, Based on the bouncing balls, do you think that a bear market will be starting anytime soon? Interested in your opinion.

[diogenes227]

Hi diogenes,

Based on the bouncing balls, do you think that a bear market will be starting anytime soon?

Interested in your opinion.

Don't know the if and when. Warning signs are mounting, but the lower trend lines on the NYSI, and the SPX, and the upper line on the VIX, to say nothing of the black cross on the 50 and 200 day moving averages on the SPX, are going to have to be in play before anything as long term as an actual bear market will arrive. None of that has happened yet so the money is still on the long side.

In other words, floating ice has been spotted but no icebergs yet as the mighty market Titanic sails on.

[diogenes227]

Recently received this email:

Question regarding NYMO if you have time. You've mentioned in the past a 'buy' spike in the NYMO that occurs early in the approximately 2 month bullish cycle (just going from memory from your old thread on the swing waves forum). Is there an equivalent type of NYMO pattern from a bearish perspective? Just wondering if that move up in NYMO during the last week of May was just that. The rapid turn down on the first rather surprised me as I didn't see any warning before hand. The turn back up on 5/25 showed some indication of a turn before it happened.

The longer term picture looks down to me and right now I'm looking at the NYMO as a bounce back to the 0 line until proven otherwise. The summation is still negative and the summation divergences over the past several months with price seem very negative also. Trying to remain objective and understand what I'm seeing. Thanks!

Yes, you could read the NYMO from the bear side too. Quite reliable (in bear markets primarily).

I'm not doing that right now because it's still a bull market and all my signals on the short side just don't work while all my signals on the long side are working quite well. It's the same system with the signals reversed.

But to take a closer look at your question. The way to read the NYMO in the bearish context is to examine its peaks, and what happens on the down ticks from each subsequent peak. So, take a look at April 4 peak. That would be the marker for the cycle. As I'd read that, 5/2 would be the down tick from the next peak. That would be the "sell spike" so to speak (also a high below the April high and a divergence with the April high besides) and a splendid short signal. Then again you have peaks and sells on 5/11, 5/20, and finally 6/1. Short all those and you probably would do quite well (assuming you have a decent cover strategy).

Interesting... Thanks for making me take a look at this. That kind of follow through on the down side has not happened for a while. We may be in transition to a bear.

I think I'll copy all this to my "Big Mac Attack" thread on swing waves with a chart to illustrate the point.

Good luck and good trading.

http://stockcharts.c...1641&r=8116.png

[diogenes227]

The NYMO low above the low appears...

Good luck and good trading.

http://stockcharts.c...1656&r=4392.png

[diogenes227]

Update from Fearless Forecasters:

NYMO - Higher lows, Lower Highs

[diogenes227]

This is a NYMO low-above-a-low buy on the close for aggressive traders with appropriate stops.

Good luck and good trading.

http://stockcharts.c...0375&r=3384.png

[DrSP]

That was very good, diogenes. While things may get slightly murky on the next round, I appreciate your effort to post the signal when it mattered last week. Please continue posting signals in real time. Best to you, SP

[diogenes227]

Gee, a low above a low on the NYMO with a rising NYSI...what is that?

[DrSP]

Diogenes, so were you long, short or both on this swing wave based on NYMO?