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Bill L.
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Methodology: setups require certain criteria to be met before trades can be executed, which include weighted statistical studies on several indicators of price, breadth, volume, and sentiment . Amount of risk taken is proportional to how many indicators are aligned. I mainly trade market... More
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  • Wednesday, October 31, 2012 - Short Term Update 4 comments
    Oct 31, 2012 6:40 PM | about stocks: SPY, DIA, QQQ, TLT, IEF, UUP, FXE, JJC

    Bottom Line:

    Most of the short term indicators I follow appear to be starting to recover from an oversold condition.

    Indicator Summary:

    • Bullish: 80%
    • Neutral: 20%
    • Bearish: 0%
    • Aggregate Interpretation: Most of the short term indicators I watch are decidedly lopsided to the bullish side of the ledger. Longer term there are some dark clouds on the horizon... that said within the long term trend there will be short term ups and downs. Right now it looks like an "up" for the next few days.

    Indicator Snap Shot:

    Percentage of Stocks Above their 20 DMA:

    (click to enlarge)

    Notes: Starting to recovering after declining into the buy setup zone.

    NYSE McClellan Oscillator:

    (click to enlarge)

    Notes: Dancing around the oversold level, there's doesn't appear to be a whole lot of downward momentum.

    NYSE New Highs - New Lows:

    (click to enlarge)

    Notes: Declined to the oversold level and appears to be turning upwards.

    NYSE Advance - Decline Line:

    (click to enlarge)

    Notes: Beginning a recovery after declining to an oversold level.

    NYSE Up - Down Volume:

    (click to enlarge)

    Notes: Updown volume appears to be following a similar pattern.

    NYSE TICK:

    (click to enlarge)

    Notes: TICK never got quite as oversold as the other indicators; neutral.

    NYSE TRIN:

    (click to enlarge)

    Notes: One of the more oversold 5-day reading's we've had in a while.

    Price Action:

    SPX:

    (click to enlarge)

    Notes: I like support when it coincides with Fibonacci levels, and technical support, which is nearly the situation currently. This way we have three uncorrelated methods painting a similar picture. Short term technical indicators are oversold, and price is resting on top of horizontal support as well as the Fib .382 retrace level.

    Dow Transport Index:

    (click to enlarge)

    Notes: The transports did not go down nearly as much as the SPX or the industrials. Short term, that's a positive. Longer term... the DJT has failed to confirm every new high in the industrials for over a year.

    Summary:

    Longer term? - Regular readers probably know, I'm not a big fan of this market. I think the grand experiment of the everlasting Bernake put ultimately folds to the deflationary pressure of the millions of crap loans getting written down to zero. That said, the trend is still up and the market has refused to go down when the bears have had control. And it looks like the bears have lost control again without being able to do much damage.

    -Bill L.

    Stocks: SPY, DIA, QQQ, TLT, IEF, UUP, FXE, JJC
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Comments (4)
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  • Bill L.
    , contributor
    Comments (682) | Send Message
     
    Author’s reply » Disclosure: small long position in SPXL.
    31 Oct 2012, 06:40 PM Reply Like
  • Jason F
    , contributor
    Comments (217) | Send Message
     
    Cool charts!
    31 Oct 2012, 08:21 PM Reply Like
  • untrusting investor
    , contributor
    Comments (9973) | Send Message
     
    Bill,
    And what happens if there is no ST bounce, and the downside continues for days yet?
    31 Oct 2012, 10:50 PM Reply Like
  • sundate36
    , contributor
    Comments (291) | Send Message
     
    Bill -- you nailed it once again!
    1 Nov 2012, 11:07 AM Reply Like
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