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I think the A/D line has lost it's value


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#11 diogenes227

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Posted 24 March 2020 - 12:12 PM

NYSE Summation also had massive divergence on test of the highs. The big gap down out of that divergence was all she wrote...

 

https://stockcharts....id=p83733137120

CLK,

 

This post by K Wave is exactly right. The NYSI divergence was huge and while you never know how far the selloff is going to go it was screaming that this bull was done.

 

When the NYMO/NYSI is acting as it usually does, it is great.  When it's not acting as it usually does, which I suppose is what you are calling "failed signals" (and which was not this time) it is even greater because those so-called "failed signals" are saying watch out, there is something really out of whack in the market.

 

The A/D line is fine but the NYMO/NYSI is better.

 

On the chart below see that red rectangle on the NYSI in the middle of the chart as the SPY was going to all-time highs? That is the huge divergence K Wave just commented on. Now look up the red circle at the top of the chart, that is the high below the high on the NYMO at the zero line. The high below a high, which I've mentioned here a thousand or so times over the years,  was one day before the plunge. You can't ask for a better signal than that. As I said above, you never know how far the market is either going to go up or down, but if you get in line with the NYMO/NYSI and, except for the mistakes you make (we all do), you will be on the right of the rise, and the fall.

 

P.S. One more thing. See the green circle on the little double bottom low-above-lows divergence on the NYMO in the last week or so?  That is what got me to talking about an up coming bounce. Today is the NYMO's gift to the bulls (and to the bears too who were getting advance notice to tighten stops or take profits).

 


"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx (on market history?).

“I've learned in options trading simple is best and the obvious is often the most elusive to recognize.”

 

"The god of trading rewards persistence, experience and discipline, and absolutely nothing else."


#12 diogenes227

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Posted 25 March 2020 - 12:53 PM


"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx (on market history?).

“I've learned in options trading simple is best and the obvious is often the most elusive to recognize.”

 

"The god of trading rewards persistence, experience and discipline, and absolutely nothing else."


#13 darnelds

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Posted 25 March 2020 - 01:11 PM

Diogenes277,

Are you looking for this to reach resistance at 270 before resuming the decline?

Thanks



#14 diogenes227

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Posted 25 March 2020 - 01:47 PM

Diogenes277,

Are you looking for this to reach resistance at 270 before resuming the decline?

Thanks
 

 

Just playing it day by day. I don't know how far it'll go. But 260-270 looks like it might be the upper reach.

 

The NYSI will be up today and likely overbought (just like that) so there may be chop for the rest of the week. And The VIX isn't quite confirming.

 

I don't know...tricky times with the news and all...

 

UPRO is up 33% already, from the time I suggested this bounce in the blog. Wow.

 


Edited by diogenes227, 25 March 2020 - 01:52 PM.

"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx (on market history?).

“I've learned in options trading simple is best and the obvious is often the most elusive to recognize.”

 

"The god of trading rewards persistence, experience and discipline, and absolutely nothing else."


#15 darnelds

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Posted 25 March 2020 - 01:53 PM

Nice call.



#16 CLK

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Posted 25 March 2020 - 03:46 PM

 

 

That was high above a high last Thur. you didn't circle it, the next two days were down big, it looks like like you are marking these signals after the fact.



#17 CLK

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Posted 25 March 2020 - 04:04 PM

It looks like you had those marked but they failed miserably, I guess you are marking divergences as potential and marking high above  high and low below low all with a circle. Bottom line is nothing is for sure or easy.



#18 diogenes227

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Posted 25 March 2020 - 05:07 PM

CLK,

 

Yes, I do mark them on that master chart after the fact just for presentation's sake, but I can see these indicators all day long in real time. See the UPRO chart? Those lines in the middle of the chart are the NYMO and NYSI from TradeStation  at the time I posted that chart.

 

And yeah, you're right. Nothing is sure or all that easy in the market but in my personal experience (a I wrote in one of those blog entries I posted a last weekend) this has been for me since 1987 simply as close as it gets to the Holy Grail.

 

I think if you'd study it, life in the market would be a lot easier for you too. Just look, for example, at that rising NYSI last December into January and what the SPY (and the rest of the market for that matter) was doing for the same period. That's about as obvious as it gets.

 

But there are nuances of course like with everything. But the nuances are seldom what you call "failures." For instance, divergences like the one recently on the NYSI that was screaming there's something wrong as the market kept making new highs. You could say that was the NYSI failing as prices rose and rose, but in fact it was the warning rising prices were about to fail big time.

 

If hadn't lived with this for 30 plus years, I'd go to Fib's site with an open mind and see what can be learned there. He's knows more about the nuances and is better at reading these indicators than I am. Or I'd take at least a trial subscription to IYB's Seven Sentinels service. He's really good with this stuff too and he is more focused technically day by day  than Tom McClellan. See Seven Sentinels on Twitter - he makes multiple tweets with charts every day.

 

But do what you want. It's all up to you. It's only money.

 

smile.png


"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx (on market history?).

“I've learned in options trading simple is best and the obvious is often the most elusive to recognize.”

 

"The god of trading rewards persistence, experience and discipline, and absolutely nothing else."


#19 CLK

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Posted 25 March 2020 - 05:55 PM

As long as the market is trending above a 10dma, the hourly dips can be bought in futures profitably. 

The NYMO often diverges weeks at a time before any meaningful drop, there probably are 3x funds traded 

day to day in a strong bull trend that can add up long and short, but the potential for gain probably is no more

than a few percent at a time. I think the NYMO is good after the market finally drops a lot in finding turns.

but the strong bull trend I don't see much advantage. I know you can say the NYMO makes lower lows and price 

doesn't, then go long. As with any system, it takes time to know what to trade on and what to ignore.



#20 diogenes227

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Posted 25 March 2020 - 07:52 PM

"As with any system, it takes time to know what to trade on and what to ignore."

 

Yup. The god of trading rewardS persistence, experience and discipline, and ABSOLUTELY NOTHING ELSE.


"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx (on market history?).

“I've learned in options trading simple is best and the obvious is often the most elusive to recognize.”

 

"The god of trading rewards persistence, experience and discipline, and absolutely nothing else."