If y'all take a aspect at this post, you'll encounter my query pertaining to the Cumulative Demand/Supply Index. To speedily recapitulate, Demand is a proprietary mensurate of the seat out of NYSE, NASDAQ, in addition to ASE closing higher upward the volatility envelopes surrounding their moving averages. Supply is a mensurate of the seat out of stocks closing below their envelopes. When I subtract Supply from Demand in addition to maintain a cumulative total, that provides an fantabulous overbought/oversold indicator. The query referenced higher upward suggests that returns get got been subnormal when the cumulative mensurate is significantly higher upward its 200-day moving average. Returns get got been superior when the cumulative index is good below its moving average.
As noted inward that before post, returns get got been especially weak when we've seen dwindling novel highs/lows inward the human face upward of an overbought cumulative index. On Tuesday, the index hitting its commencement overbought degree since Feb 13th in addition to Feb 1st before that. Both of those prior occasions led to selloffs. I bring out that novel 20-day lows brutal on Midweek from Tuesday's level. I'll hold upward watching those novel highs closely; continued deterioration volition atomic number 82 me to aspect a render of the cumulative index dorsum to its moving average (as happened inward the before occasions this month), which mostly provides a promising swing trade.
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