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| StatTrader |
 Posted: Tue Nov 20, 2007 1:12 pm Post subject: Market Bottom Ahead |
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Member Of The Month! April
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Finally, after waiting what seemed an eternity for the internal market statistics to signal a bottom, it is here. This Friday, the day after Thanksgiving, will be at or past the market bottom.
The charts that appear below, with the exception of the chart of the SP-500, have been updated through Monday the 19th. The SP-500 chart is current.
The first 4 charts below show 30-day simple moving averages. Since it is a moving average, one can look at the numbers that will be getting dropped to 'see' the direction the indicator is likely to take. If negative numbers are being dropped then the indicator should rise unless those numbers get replaced by even bigger negative numbers. Hence, the market can still go down even if the indicator changes direction and goes up. However, once the indicators reach extreme levels the markets usually follow the indicator once it turns. The easiest way to 'see' the numbers that are getting dropped in the week ahead is to plug in neutral numbers for the coming week and graph out one week into the future.
The first of these charts is the weekly breadth. In Excel, one column is the difference between the number of advancing and the number of declining issues on the NYSE (market breadth), the next column is the sum of the preceding five days of the first column, and the last column is the 30-day moving average of the second column.
This indicator will should bottom on Friday the 23rd.
Another indicator is the 30-day moving average of market breadth, similar to the indicator above but without the summation step.
This indicator should bottom on Wednesday the 21st.
The next indicator I refer to as the volume breadth. It is calculated similar to the first indicator above but using the difference between upside and downside volume.
This indicator should bottom out on Friday the 23rd.
The next is the 30-day moving average of upside volume as a percentage of total volume on the NYSE.
This indicator stop dropping on Tuesday the 20th, today, but will have a secondary bottom on Monday the 26th before starting to rise in earnest.
The next charts only go through Monday the 19th. No attempt is made to 'see' into the future.
The 10-day and 30-day moving averages of the CBOE Equity Put/Call Ratio show that the 10-day average has temporarily peaked and the 30-day is still rising. These indicators run inversely to the markets so it is good when they fall. The 30-day rising remains worrisome though it is near levels that have marked some prior market lows.
The ratio of upside to downside volume on the NYSE has been worrisome of late. It is bearish whenever this indicator drops below 100%. It is computed by dividing the 20-day exponential moving average (EMA) of the volume on the preceding up days with the 20-day EMA of the volume on the preceding down days. A healthy market will see stronger volume on up days than on down days.
This indicator bottomed at 94% on Monday, November 12th, and reached 97.6% by the 19th. It is moving strongly back toward 100%.
The percentage of stocks trading above their 50-day moving average usually reaches over 80% at market tops and falls below 20% at market bottoms. It is tantalizingly close to the 20% level now.
The bullish percentage on the SP-500 usually drops below 52% at market lows. We have easily surpassed that level. The high 30% range is unusually low and definitely is supportive of a rally. At this level, most of the sellers have already sold. The remaining participants are 'strong' holders, in for the longer haul.,
The next indicator is the McClellan Summation Index (MSI). Generally I wait for the MSI to turn before calling a market bottom. This time I'll make an exception. It has already reached the levels that are normally indicative of market bottoms, and given the state of the other indicators, I expect that the MSI will turn upwards in the early part of next week.
Another indicator that 'should' turn to support the markets is the TRIX of the SP-500. Below is the SP-500 with the TRIX (15, 9) graphed below. Note that the TRIX is reaching extreme levels. Again, given the other indicators, I expect that this will turn early next week.
Summary: The first three charts above that 'see' into the future have a very good track record for pinning down the market bottoms within a day or two. They are pointing to Friday as the market bottom. So the brave may want to jump in then. For those that prefer some additional confirmation that a bottom has occurred, waiting for the MSI and the SP-500 TRIX to turn would be prudent. Taking the latter course may miss the absolute bottom but usually not by much; allowing the investor to still capture the majority of the upside move.
For now, be careful out there.
Starting Friday, have fun. |
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| StatTrader |
| Posted: Sun Dec 02, 2007 11:33 am Post subject: |
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Member Of The Month! April
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All the indicators show an upward bias for the markets, at least through the end of the week. This rally has more steam left in it.
My main concern is that we may see the rally end at a lower high than the high we had in early October. That would be bearish overall for the markets.
Remember, my indicators give only portend the direction of the market, not the magnitude of any moves. Hopefully the indicators won't show weakening momentum until after the markets make new highs.
Have fun out there, |
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| TSIG |
| Posted: Wed Dec 12, 2007 7:07 am Post subject: |
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New Poster
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| Good gathering of the information. |
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| mindlessbombs |
| Posted: Fri Feb 01, 2008 10:45 am Post subject: |
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Investing Associate
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| alot of good information.. your making me smarter with my projections... IT HURTS, IT HURTS.. haha thanks |
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| prs1065 |
| Posted: Sun Feb 17, 2008 1:05 pm Post subject: |
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Investing Sr. Associate
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| the market wont go below 12000. |
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| deprived |
| Posted: Mon Feb 18, 2008 8:47 am Post subject: |
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Investing Sr. Associate
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now is the time to really buy stocks  , stocks are dropping and when it turns around you be able to reap the $$$. |
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