5 replies to this topic

[Echo]

Noted the nasdaq up to down ratio over the past month and it struck me how positive it had been.

Here is a plot of same (made invisible on the chart), only showing the 20ema of this indicator. We've had a volume thrust unmatched since the kick-off from the Oct 2002 nasdaq lows!

http://stockcharts.com/c-sc/sc?s=$NAUPV:$NADNV&p=D&yr=6&mn=5&dy=0&i=p17987747249&a=116324115&r=2503.png



Also note the extreme nasdaq 4day ARMS indicator study here:

http://forums.techni...post?id=2132767



For more breadth thrust analysis, see here:

http://forums.techni...post?id=2143350



We've just had a repeat of the 15:1 down:up vol day, followed by a 15:1 up:down vol day last seen at the lows in March. Can't exclude a lower low, but only to the lows of the UP day (around 1430)







Read about this indicator from Jason Goepfert post from March 2007 at this link (scroll down a bit):

http://www.hamzeiana.../Jason Geopfert



Sure, we might go lower here Monday or later, but using TA and statistical analysis of the money flow, what do you think the probable outcome will be if you look 15-30 or more days down the line? Data most helpful for IT buy entry, not daytraders or VST horizons.

Echo

[jonbear]

Echo,

Great summary of valuable information. Thanks for sharing your insights.

I came across this article this morning, in the online edition of the Wall Street Journal, that made me wonder about if there is a way to quantify the impact of new SEC rules on traditional technical indicators such as volume thrusts and ARMS/TRIN.

Regards, Jon

http://online.wsj.co...y_and_investing

MARKET MOVERS
New Rules For Picking A Bottom?
By E.S. BROWNING
September 10, 2007; Page C1

-snip
"Because other indicators are looking somewhat negative, Mr. Desmond thinks the recent surge in 90% days could be a false signal. For that, he blames, in part, the Securities and Exchange Commission. In early July, the SEC eliminated a rule that restricted a practice known as short selling, in which investors borrow stock and sell it in hopes of profiting if the stock's price declines. The old rule, instituted after the 1929 crash and aimed at preventing floods of stock selling, generally allowed short sellers to sell borrowed stock only on an uptick -- after a purchase had sent the price up. Now short sellers can sell at any time."

Edited by jonbear, 10 September 2007 - 07:18 AM.

[Echo]

Jonbear, Thanks for the feedback. The elimination of the uptick rule would not effect the Up Vol thrust side of the equation which was the point of the first chart. Other than a few occasions, the 20ema of the ratio of greater than around 2.25 was typically associated with much higher prices down the line. Same argument for the very low 4 day ARMS study which showed massive buying, again not affected by the uptick rule. The final studies do use 90% down vol days and 15:1 down vol ratios and might be affected, however, if you look only at the UP vol side of the triggers, I am sure they results will be just as impressive. Desmond's comments are most applicable to studies ONLY using clusters of down vol days to point to bottoms. Hope this covers your comments. Echo

[wyocowboy]

I'm a little late replying to this, but in the summer of 06 Desmond and Davis were bearish despite the Zweig double 9 to 1 signal. It is very interesting that they are once again doubting their own data.....

[Echo]

Wyocowboy, interesting indeed. Why study an indicator if you are going to consistently start to doubt it?

Just an update on the extreme 4day trin from last Tuesday's high. Today's intraday low in the nasdaq is now 3.55% below last Tuesday's close and mostly satisfies previous drops seen with the same data.

Small point change on the dow, oex, and ndx breadth mco. Look for a big move in the market in the next 1-2 trading days.

More update available here: http://forums.techni...post?id=2132767 see the last post.

Echo

Edited by Echo, 10 September 2007 - 10:53 PM.

[Echo]

Update:



http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=1&mn=5&dy=0&i=p75331565778&a=116322603&r=607.png



Seeing is believing. Echo