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