Info!! A Historically Oversold Market

This by week, the Dow Jones Industrial Average traded almost 34% below its 200-day moving average. This eclipses the oversold weather condition from the postal service WWII era. Indeed, equally the nautical chart higher upwards indicates, since 1902 we've alone had ane catamenia of greater oversold conditions: the Depression marketplace of 1932. Looking for marketplace bottoms using historical analogues from modern markets has been hazardous to investors' wealth.
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Info!! Lessons Nosotros Tin Accept Away From Broadly Oversold Markets

And the trick, of course, is getting cutting the right way.  An uncut diamond isn't worth much, as well as a diamond cutting the incorrect way is every bit good flawed to hold upward worth anything.  When nosotros accept losses the right way as well as larn from those, that's when nosotros prepare the facets that orbit us value every bit traders.

One of the bad cuts I meet people taking inwards the recent equity markets is failing to adjust to new, volatile marketplace seat conditions.  Buy the dip at VIX of 12 is quite unlike from the same strategy at VIX of 24.  When a marketplace seat becomes to a greater extent than volatile, nosotros merchandise to a greater extent than book per unit of measurement of time.  Moves that mightiness cause got unfolded inwards hours straightaway occur inwards a few minutes.  That has relevance for how yous size positions as well as how much oestrus yous tin accept on ideas that ultimately run out.

I looked at the overbought/oversold statistics from Index Indicators as well as institute something outstanding.  Fewer than 5% of stocks inwards the SPX are trading higher upward their 3, 5, 10, as well as 20-day moving averages.  In other words, non solely are nosotros quite oversold; nosotros are real broadly oversold.  Essentially everything has gone down.

So what has happened historically after such broadly oversold occasions?

Since 2006, when I began my database, nosotros cause got solely had xv other such days.  That way that broadly oversold markets solely occur less than one-half a per centum of the time.  As nosotros saw inwards the final post, this way that the electrical flow marketplace seat conditions are historically rare.  Below nosotros tin meet the dates of occurrence inwards chronological order:

9/29/2008

10/7/2008

10/9/2008

11/20/2008

5/6/2010

5/7/2010

5/20/2010

8/2/2011

8/4/2011

8/8/2011

10/3/2011

11/23/2011

8/24/2015

8/25/2015

2/8/2018

We tin meet right away ii things:

1)  These rare occasions tin "clump".  When nosotros meet one, it's non odd for others to follow.  This is also something nosotros saw inwards the final post.  Influenza A virus subtype H5N1 real oversold marketplace seat tin remain oversold for a catamenia as well as indeed acquire to a greater extent than weak.

2)  These occasions cause got occurred during markets nosotros cause got recognized every bit meaningful corrective periods or every bit deportment markets.  These occasions cause got also been accompanied past times important volatility.  The median VIX for the xv occurrences has been close 41.  The median VIX for the balance of the sample is a lilliputian over 16.

And what cause got been the forrad paths for these broadly oversold markets?

*  Bounces cause got been the norm, simply it's non ever a one-way path.  The side past times side solar daytime has been nine up, six down.  Two days afterward has been 12 up, iii down.  Five days afterward has been 12 up, iii down.  That existence said, x trading days afterward nosotros meet 8 up, vii down.  Ten of the xv occasions cause got posted a lower daily closed inside a x trading solar daytime period.  Two-sided markets over the side past times side ii weeks are non unusual.

*  Forward volatility is expectable.  Thirteen of the xv occasions moved to a greater extent than than 2% from roughly closed over the side past times side ii trading sessions.  Nine of the occasions moved to a greater extent than than 4% upward or downwardly over a side past times side five-day period.  Very large moves are non uncommon.  During 2008, nosotros saw near-term closes upward 9% or to a greater extent than as well as downwardly 9% or more.  After the 2011 occurrences, nosotros saw moves upward as well as downwardly exceeding 5%.

*  There has been chance longer-term.  The longer-term investor recognizes that broadly oversold markets are taking downwardly high quality, increment companies along amongst less stellar firms.  This tin attain odd value for private stocks as well as also for the market. With the exception of the 2008 occurrences--a protracted deportment market--we were meaningfully higher inwards SPX i yr after the wide selling periods.  If nosotros believe this to non hold upward a recessionary catamenia amongst major economical dislocations, the drib tin hold upward a groovy chance to purchase stocks for longer-term belongings periods.  

So it's dorsum to the subject of getting cutting the right ways.  When marketplace seat participants puke, it's mutual to meet favorable forrad returns, simply non without volatility as well as retracements.  Shorter-term traders tin accept each solar daytime every bit it comes, knowing at that topographic point volition hold upward meaningful crusade to capture.  Longer-term investors tin seat stocks worth snapping upward at bargains, simply also attain marketplace seat hedges (and size appropriately) to conditions the forrad volatility.

Knowing historical patterns is a groovy way to attain oneself for forrad cost paths.

Further Reading:

What Happens After a Big Down Day?

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Info!! Oversold Inwards An Oversold Market: What Happens Next?

I've been interested to meet a position out of bearish stories close the stock marketplace position inward recent days.  Somehow these stories were missing when nosotros were trading about the highs.  But the supposition seems to travel that because we've seen weakness inward stocks, oil, high yield bonds, etc., nosotros are inward danger of an outright behaviour market.

Maybe.  

Sometimes that happens.  

But is that genuinely a trade-worthy idea?

Yesterday, nosotros saw fewer than 10% of all stocks inward the SPX average trading higher upwards their three-day moving averages.  The marketplace position is broadly weak inward the brusk run.  Interestingly, when nosotros human face at how the SPX stocks are trading relative to their 5, 10, 20, 50, 100, together with 200-day moving averages, good fewer than 50% are trading higher upwards those benchmarks.  So we're real oversold on a short-term solid soil inward a marketplace position that is likewise oversold on a medium together with longer-term basis.  (Data from the fantabulous Index Indicators site).  

It turns out that this configuration has occurred 46 times since 2010.  Ten days later, the SPX has been upwards 33 times together with downwardly xiii times for an average attain of over +1.63%.  Many of the losing instances clustered inward the 2011 menses when nosotros had some prolonged weakness.  Similarly, when nosotros receive got the information dorsum to 2006, losing instances clustered inward 2008/2009, hence that at that topographic point was a positive supply over the adjacent twenty-four lx minutes menses or ii from 2006-2009, simply really a negative average supply over the next x days.

There is a subtle simply of import lesson here.  The human style is to brand an supposition close whether nosotros are inward a bull or behaviour marketplace position together with and hence extrapolate expectations on that basis.  Influenza A virus subtype H5N1 improve purpose of the information is to recognize that the sort of pullback we've seen is historically a real proficient buying chance inward all simply pregnant bearish periods.  If nosotros create non meet a sustained bounce every bit nosotros walk frontwards twenty-four lx minutes menses over day, nosotros tin update our thinking to increase the odds that perchance we're inward the throes of a bear.  Conversely, if nosotros meet sustained buying, nosotros tin query the behaviour thesis every bit nosotros walk forward.

Rational traders together with investors run inward a Bayesian manner.  They initiatory of all alongside a researched base of operations illustration founded on sense together with and hence expire along an opened upwards mind, modifying the odds of their base of operations illustration every bit novel information emerge.  For them, conviction is a process, non something nosotros receive got or don't have.

Further Reading:

Trading Without the Ego

Home Page together with Index

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Info!! Indicator Review For June 30Th

most recent indicator review institute continuing marketplace weakness and, in i lawsuit again, we've seen to a greater extent than of the same this by week. The adjusted Demand/Supply Index (top chart) in conclusion hitting the -30 degree that has been typical of intermediate-term marketplace lows over the by few years, which suggests a real oversold market. On the mode to that level, however, we've seen an expansion inwards the number of NYSE, ASE, in addition to NASDAQ stocks making fresh 65-day lows (middle chart) in addition to a breakdown inwards the advance-decline business specific to NYSE mutual stocks (bottom chart; credit to recent await at the market's technical strength institute that the weakness has affected close of the major sectors. Only 17% of S&P 500 Index ($SPX) stocks are trading higher upwards their 50-day moving averages; that number is solely 13% for NASDAQ 100 Index ($NDX) issues in addition to 3% for Dow Industrials ($DJI) shares. Small caps accept been stronger, amongst 22% of S&P 600 Index ($SML) stocks higher upwards their 50-day benchmarks.

Among NYSE mutual stocks, nosotros had 24 stocks making 52-week novel highs on Fri against 289 lows. That compares to over 300 novel lows at the March bottom in addition to over 700 at the Jan bottom. Large cap issues--particularly inwards the Dow--are much weaker instantly than at those 2 prior junctures, but we've seen around residuum line amid modest cap in addition to midcap shares. For example, nosotros had solely 52 novel annual lows amid S&P 400 midcap stocks ($MID) in addition to 65 amid S&P 600 modest caps. Both those numbers are good below their Jan in addition to March peaks.

The bottom business is that nosotros are at oversold levels that historically accept led to intermediate-term bottoms, but we're non yet seeing signs of buyer involvement inwards stocks. To the contrary, we've seen a steady weakening of the marketplace indicators. As long equally that's the case, it's been unsafe to displace to grab the market's falling knives.
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Info!! Trading Notes For The Calendar Week Of March 28, 2016

Friday, Apr 1st

*  Top twenty people to follow on Stock Twits as well as Twitter for corking marketplace position content.  Of course, Ivaylo is besides pocket-size to include himself, hence I'll nominate him hither both for his spider web log content as well as his books. 

*  We've pulled dorsum from recent highs, equally my measures of realized resultant fourth dimension volatility hold lower--a province of affairs that, inwards the past, has been associated amongst subnormal forrard returns.  Stocks making novel monthly highs across all exchanges declined from 1221 to 822; monthly lows ticked upward from 106 to 137.  So it's difficult to say that nosotros pick out weak breadth.  As noted yesterday, my mensurate of upticks vs. downticks has continued positive.  Yesterday was positive, but full institutional participation contracted least since the rally began.  Again, this has been associated historically amongst subnormal returns.  Institutional participation is a mensurate of full upticks as well as downticks across all NYSE shares (not mass traded).  The depression mass as well as volatility brand me non peculiarly bullish; the absence of novel lows as well as downticks brand me non peculiarly bearish.

*  My cycle mensurate continues inwards positive territory but off its highs.  Many of my breadth measures await this way:  positive, but off their peaks.  Note how we've stayed positive for much longer than during recent cycles--again a tell that this has been to a greater extent than than a comport marketplace position rally or fifty-fifty a bounce higher inwards a make market. 

*  Are in that location microtrends inside the marketplace position as well as are these tradeable?  Hell, I pick out no idea, but I'm researching it.  Will permit y'all know what I find.  This volition live on a purely systematic implementation.  My other inquiry projection is identifying longer term cycles inwards the stock market, amongst information going dorsum to 1980.  This is based on a unique implementation of the resultant fourth dimension concept.  Basing resultant fourth dimension on mass doesn't move because of the secular differences inwards mass over the catamenia of decades.  If you're non innovating, you're stagnating.  Too many traders pat themselves on the dorsum for doing the same affair 1 time again as well as 1 time again as well as calling it discipline.  Influenza A virus subtype H5N1 disciplined implementation of an outmoded approach volition lose coin amongst admirable consistency.

*  If y'all await at stocks exterior the U.S., such equally the EFA ETF, the longer-term motion painting is pretty unimpressive.  It is non clear to me that negative rates are having the desired affect overseas.  If this is the case, nosotros could run into to a greater extent than aggressive key depository fiscal establishment stimulation of economies, peculiarly if those indicators of deflation--strengthening currencies, weakening commodities, etc.--become to a greater extent than problematic.  

Thursday, March 31st

*  Is the housing marketplace position strong or weak?  See It Market notes mixed signals amidst furnish constraints.

*  Oil as well as commodities overall (DBC) pick out been lagging stock toll gains recently; keeping an oculus on that relationship.  I'm also noticing high yield bonds (JNK) lagging recent toll gains inwards stocks.  These relationships were key during the catamenia of marketplace position weakness.

*  Stocks rallied nicely early on yesterday, 1 time again posting fresh rally highs earlier pulling back.  Breadth 1 time once again expanded, amongst over one m stocks across all exchanges posting fresh monthly highs.  My mensurate of upticks vs. downticks continued quite strong; below nosotros tin run into a 10-day moving average.  As mentioned before, mass has non been impressive, but the mass traded has been quite skewed toward the buyers:

*  One of my pure volatility measures continues at levels to a greater extent than consistent amongst marketplace position highs than lows.  Note VIX straightaway trading a flake higher upward 13.  This has the potential to significantly constrain directional movement across all fourth dimension frames.  There is less mass traded, *and* each unit of measurement of mass moves toll less.

*  Note the continued forcefulness of liquid, high character corporate bonds (LQD).  In a globe of depression as well as fifty-fifty negative rates, whatever yield becomes a prophylactic haven.  Hence the surroundings inwards which stocks as well as bonds pick out been jointly outperforming (the conduct a chance parity trade).


Wednesday, March 30th

*  New Trader U highlights 22 bad trading habits.  Notice how many of them boil downwards to non existence rule-governed, where the rules reverberate trading strengths as well as identified best trading practices.  That suggests that traders are suffering, non simply because they don't written report markets, but because they haven't genuinely studied their ain performance.

*  Stocks liked the statements of the Fed chair as well as that has lifted us to a novel high for this rally.  Interestingly, across all stocks on all exchanges, iii calendar month novel highs versus lows are lagging their peak from a dyad of weeks agone (see below).  Among SPX shares, however, fresh 100-day highs vs. lows did hitting a marginal novel peak.  I would larn concerned nearly the uptrend if stocks making fresh novel lows were to expand from here.

*  Once again, nosotros saw buying pressure level completely dominate selling pressure level via the uptick/downtick measures.  This lifted the cumulative uptick/downtick mensurate to novel highs (see below).  As noted yesterday, mass has non been stellar (though it picked upward yesterday), but what mass has been in that location has been strongly skewed to the buyers as well as that has been associated historically amongst favorable near-term returns (upside momentum).

Tuesday, March 29th

*  How tin y'all honor merchandise opportunities that others miss?  Here is a procedure that tin assistance y'all larn amend at perceiving opportunity.

*  Meh.  Volume has been quite lackluster, as well as that is to a greater extent than typical of marketplace position tops than bottoms.  We remain inwards relatively oversold territory on my swing measures as well as my measures of upticks vs. downticks remain strong.  So my base of operations illustration remains a continued displace higher, but I can't say I'm peculiarly impressed amongst recent action.  Financial as well as unloosen energy shares pick out been relatively weak as well as I hold to hold an oculus on little caps.  Perhaps calendar month end/quarter cease flows volition convey about life to the market.  Stocks making fresh monthly highs did uptick yesterday as well as I'm non seeing an influx of selling at all.  Of the (low) mass acquaint yesterday, buyers were dominant.

*  Put/call ratios were depression yesterday; shares outstanding for SPY pick out been modestly elevated.  Bears are relatively absent.

*  We're working off quite an overbought level, per the intermediate-term forcefulness nautical chart below, which tracks the release of SPX shares making novel highs vs. lows on multiple fourth dimension frames.  To the extent that nosotros tin produce hence amongst minimal toll damage, it is supportive to the bulls.

Monday, March 28th

*  In illustration y'all missed, here's my latest podcast; thank y'all to Chat With Traders.

*  We've bounced from a swing oversold degree and, equally nosotros tin run into below, are non yet at an overbought level.

*  Buying involvement hitting a novel rally high amongst this most recent bounce.  This mensurate tracks upticks versus downticks for all listed stocks, non simply those on NYSE.  

*  The 1 wing inwards the ointment that I run into is the depression mass as well as volatility, which are associated historically amongst subnormal forrard returns over an intermediate-term horizon.  My mensurate of cumulative upticking as well as downticking is non yet at such a depression request that would advise pathetic near-term returns.  As a rule, bull moves decease amongst an absence of buyers.  It's something I'm monitoring daily.

Info!! How Weak Is This Market?

I lately noted that it has been rare historically to honour over 50% of all listed stocks making novel 52-week lows on a given trading day. When nosotros accept seen such occasions, such every bit May, 1970 together with October, 1987, it has non been odd to come across multiple such weak days, every bit really oversold markets beget farther selling inward the curt run. Interestingly, Midweek qualified every bit such a weak hateful solar daytime on the heels of Monday's historic weakness. On Wednesday, nosotros had over 5200 issues across the NYSE, ASE, together with NASDAQ brand fresh 20-day lows together with over 4000 brand novel 52-week lows. Over one-half of NYSE stocks made novel annual lows on Wednesday, next inward Monday's footsteps.

Statistics covered yesteryear Decision Point farther give away the historic extent of marketplace weakness. Only 3% of stocks inward the S&P 500 Index together with 4% of NYSE issues are forthwith trading higher upwardly their 200-day EMA--a lower grade than seen during the 2001-2003 comport market, together with the lowest grade since the panic turn down of 1987. Among mutual stocks alone inward the NYSE universe, 1 made a 52-week high; 1048 made novel lows, a novel tape for this comport market.

Bottoms are made when selling becomes exhausted together with long-term participants perceive value together with elevator stocks sharply off their lows. That exhaustion tin come about over a menses of months, every bit fewer stocks together with sectors brand novel lows over fourth dimension together with private stocks together with sectors honour fresh buying interest. Thus far, we're non seeing such selling exhaustion; weakness has, together with then far, begotten farther weakness. While it is tempting to telephone telephone marketplace bottoms together with choice upwardly bargains, all nosotros tin grade Midweek is that a historically weak marketplace merely got weaker.
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Info!! Trading Notes: Calendar Week Of 8/24/15

Friday, August 28th

*  Buying weakness yesterday ended upwards beingness a useful strategy for much of the day, exactly a potent selloff as well as and thus buying reversal inward the concluding 2 hours of the trading session made for volatile trading.  I hold to await these volatility aftershocks to endure amongst us, equally noted inward Wednesday's post.  That beingness said, the pure volatility mensurate has been mostly trending downwards over the yesteryear several sessions, though it's yet at historically high levels.  

*  The blueprint of improving breadth has continued.  Interestingly, nosotros had 131 stocks across all exchanges register fresh novel monthly highs as well as 136 brand novel lows.  That novel depression figure compares amongst 726 as well as 840 during the prior 2 sessions as well as 3553 at what appears to endure a momentum low.  As long equally nosotros encounter higher prices, potent NYSE TICK readings, as well as improving breadth, my game innovation is to purchase weakness, specially if it tin arrive at the axe concord higher upwards the overnight lows.

*    Pertinent to the number of declining, exactly yet high volatility, is the pass upwards inward book inward SPY over the yesteryear several sessions.  We peaked at 507 1 chiliad m shares traded on Monday, as well as thus roughly 369, 339, as well as 275 1 chiliad m the yesteryear iii days.  One of my quant routines estimates the probable day's arrive at (very helpful for establishing cost targets on trades), amongst book equally a major input.  By seeing how today's book unfolds, nosotros tin arrive at the axe approximate the probable day's book as well as brand informed estimates equally to probable cost arrive at for SPY.

*  H5N1 mensurate of the breadth of marketplace position clit that I rails daily is the number of NYSE shares that arrive at purchase vs. sell signals for diverse technical measures.  Yesterday nosotros had 520 purchase signals vs. 20 sells for the Parabolic/SAR measure.  We've had xi occasions where we've had over 400 purchase signals on that mensurate since June, 2014, when I began collecting the data.  Three days later, SPY has been upwards viii times, downwards 3 for an average gain of +.49%.  It's equally good pocket-size a sample to hang our hats on, exactly does serve equally a overnice reminder that potent upside thrust leading to a short-term overbought province of affairs (over 90% of SPX stocks are higher upwards their 3- as well as 5-day moving averages) does non necessarily atomic number 82 to "mean reversion".

Thursday, August 27th

*  Per yesterday's post, nosotros did indeed encounter a seek out of lows inward Wednesday's session, followed yesteryear important buying.  The NYSE TICK has provided really practiced tells for the recent marketplace position action, equally wide downticking was followed yesteryear wide upticking really early on inward yesterday's rally.  That clit has continued into the overnight, all of which is consistent amongst the view of having position inward a momentum depression per Tuesday's comment.

*  Another practiced state inward yesterday's merchandise was the continued drying upwards of the number of stocks making fresh novel lows on weakness.  We had 726 monthly lows across all exchanges yesterday versus 840 on Tuesday as well as 3553 (!) on Monday.

*  The pure volatility mensurate continues at high levels, suggesting that book as well as volatility powerfulness endure amongst us for a while.  We remain higher upwards xxx inward VIX, off the highs exactly significantly elevated relative to close of 2015.

*  I notice that the psychological issues faced yesteryear traders inward this recent marketplace position are related to difficulty adapting to the recent changes of trend, correlation, as well as volatility.  Per the recent Forbes article, a big purpose of emotional upheaval inward trading comes from the mismatch betwixt the patterns we've operate out accustomed to seeing inward markets as well as the novel patterns that are playing themselves out inward electrical flow marketplace position action.

*  I regime annotation that 89% of SPX stocks are right away trading higher upwards their three-day moving averages, exactly alone a piffling over 2% are trading higher upwards their 10-day averages.  I await that latter number to growth significantly, equally our correction from the recent weakness plays itself out inward fourth dimension equally good equally price.  My game innovation is to endure opened upwards to buying weakness equally long equally nosotros remain higher upwards the overnight lows.

Wednesday, August 26th

*  The pause of the 1920 degree inward ES referenced yesterday showed us that the mainland People's Republic of China cutting was non a game changer, as well as nosotros continued the volatile downward market.  Interestingly, fewer stocks made fresh novel lows yesterday relative to the twenty-four hours previous.  Specifically, nosotros had 3553 monthly lows across all exchanges 2 days agone as well as alone 840 yesterday.  This would endure consistent amongst having position inward a momentum low, which on major declines tin arrive at the axe precede ultimate cost lows yesteryear weeks or fifty-fifty months.  

*  Yesterday nosotros had fewer than 5% of all SPX stocks trading higher upwards their 3, 5, 10, 20, as well as 50-day moving averages.  Going dorsum to 2006, at that spot bring alone been iv occasions inward which we've seen similar wide weakness:  10/7 as well as 10/9 of 2008; 11/20 of 2008; as well as 8/8 of 2011.  Over the adjacent iii trading days, SPY moved -9.74%; 9.68%; 13.95%; as well as 4.75%, respectively.  Note the really high volatility going forward.

*  Note also that the dates higher upwards did non brand ultimate cost lows for a number of months, exactly ultimately led to major bull marketplace position moves.

*  I am warning for the possibility of our putting inward lows close term as well as am watching that 1830-1850 degree inward ES closely.  I would await the combination of brusk roofing as well as value buying inward the high volatility surround to create a major snapback rally from these really oversold conditions.

Tuesday, August 25th

*  The volatility warning proved useful for Monday's trade, equally nosotros blew out to a VIX of forty yesteryear the unopen as well as traded amongst a daily truthful arrive at inward excess of 8%.  We traded good off the day's lows, inviting the hypothesis that we've seen a momentum depression for this downwards move.

*  Contributing to the view of a momentum depression is the unusually broad, weak breadth.  Over 400 SPX stocks made fresh 20 twenty-four hours lows yesterday.  We haven't seen that form of wide weakness since early on August, 2011.  That indeed was a momentum low, exactly regime annotation that stocks drifted lower, albeit amongst fewer stocks registering novel lows, for a yoke of months after that.

*  I volition endure watching commodities closely, equally these bring been a useful warning for EM equity weakness as well as weakness inward States of America stocks.

*  I volition also endure watching the ES 1920 area, equally that was the close recent depression prior to the mainland People's Republic of China statement of a reserve ratio cut.  If that displace yesteryear mainland People's Republic of China was a game-changer, that degree inward ES should hold.  Game innovation is to purchase weakness that holds higher upwards that 1920 level.

Monday, August 24th

*  There's a really primal betoken toward the destination of the recent Forbes article:  many times what nosotros translate equally a trading occupation genuinely represents *information*.  For example, the trader who has difficulty pulling the trigger may really good intuit that the marketplace position surround has changed as well as that what had been practiced risk/reward may non endure thus at the moment.  Similarly, frustration could endure a really practiced early, emotional signal that regimes bring changed.  We pass a lot of fourth dimension trying to preclude as well as fighting emotions inward trading when mayhap nosotros should endure focused on learning from them.

*  With honour to the recent article, also regime annotation the v things I facial expression for to position changing regimes.  Very helpful inward adapting to marketplace position conditions.  These volition endure relevant 1 time we're cook for the conduct to turn.

*  We hold to encounter cost behaviour that is wildly unlike from what nosotros seen through close of 2015.  For example, from midnight to viii AM EST thus far today, we've printed 150 bars based upon 500 ticks of cost movement.  By contrast, on the Mon 2 weeks ago, from midnight to viii AM nosotros printed half-dozen such bars.  My pure volatility mensurate continues to brand novel highs, important that we're getting to a greater extent than crusade from to a greater extent than volume, exactly also to a greater extent than crusade per unit of measurement of volume.  This makes gamble management tricky, equally nosotros tend to rely on the same fourth dimension frames for asset periods without realizing that asset a merchandise for a sixty minutes right away is similar asset for a twenty-four hours before inward the year.

*  We closed Fri amongst fewer than 5% of SPX stocks trading higher upwards their 3, 5, as well as 10-day moving averages.  That form of wide short-term weakness has been to a greater extent than typical of 2010 as well as 2011 markets than recent ones.  Very often, when we've had such wide weakness, the showtime thrust downwards has been followed yesteryear farther weakness, which is what we've seen overnight.  I hold to favor selling bounces until there's approximately evidence that selling pressure level cannot hold to yield weakness across the vast bulk of sectors.
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