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Risk Windows and The Good, The Bad & The Ugly


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#1 Douglas

Douglas

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Posted 17 July 2021 - 11:41 AM

According to my risk summation system, the days next week with the highest risk of a turn in or acceleration of the current trend in the DJIA are Monday the 19th of July and Friday the 23rd.  

 

Last week's 14 &15 of July risk windows appear to have been a direct hit on a sort of a double top in the DJIA, and the 36/72 week cycle was kept alive by the Friday sell off, so all in all a pretty good week for the system.

 

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Sentiment, as exemplified by the Equity P/C ratio shown below, has reached a "Good" level which has recently signalled a time to buy. 

 

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If sentiment is good, then the NYSE common stock AD line is definitely "Bad" diverging severely with the index now for several weeks.

 

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But the real fly in the bull's pudding is the "Ugly" relative strength of the very broad Russell 2000 represented below by the IWM ETF versus the narrow large stock DJIA ETF.  

 

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I have to think that this three way shoot out, unlike the one at the end of that famous movie, is not going to have such a happy ending for Blondie, Tuco or Angle Eyes.

 

Regards,

Douglas