Info!! Indicator Update For March 31St

Last week's indicator update concluded, "I would non survive surprised to run into consolidation next the rigid toll ascent off the early on March lows. That consolidation should survive relatively apartment if we're going to sustain closed to other leg upward." Since that time, nosotros did run into farther forcefulness inwards the rally concluding week, followed past times consolidation that took us beneath the 800 grade inwards the S&P 500 futures.

The to a higher house charts exhibit where nosotros stood equally of Friday's close, in addition to nosotros tin laissez passer on the axe run into the double operate past times inwards novel 20-day highs minus lows (bottom chart), fifty-fifty equally toll had moved higher inwards the large caps. We tin laissez passer on the axe also run into from the Cumulative Demand/Supply Index (top chart; a cumulative index of the release of stocks closing to a higher house versus below their short-term volatility envelopes) that nosotros are at real overbought levels.

As I've stressed for several weeks now, these peaks inwards the Cumulative DSI (which is my preferred overbought/oversold measure) convey occurred at successively lower toll highs, which is feature of longer-term ship trends. We involve to run into an expansion of 20-day novel highs in addition to an mightiness to concur the 800 grade inwards the S&P 500 Index on pullbacks earlier nosotros tin laissez passer on the axe conclude that the electrical flow rally is something to a greater extent than than a trigger-happy ship marketplace bounce.

To this point, rallies to a higher house 800 convey been met alongside rigid selling, equally nosotros saw belatedly inwards today's session. Should nosotros run into lower toll highs on bounces inwards the Demand/Supply Index or should nosotros run into fewer novel highs (and specially to a greater extent than 20-day lows) on bounces, I would survive looking for a deeper correction into the wide trading arrive at defined past times concluding week's highs in addition to the ship marketplace lows. As always, I volition survive tracking Demand/Supply in addition to novel highs/lows daily via Twitter.
.

Info!! Indicator Update For June 1St

Last week's indicator review concluded that "I maintain to sentiment us every bit inside the May range, leaning toward fading gain extremes unless expanding novel lows together with collapsing NYSE TICK order us otherwise." We did non run across an expansion of novel lows or a spend upward inward the Cumulative TICK this past times calendar week and, amongst Friday's belatedly rally, ended upward knocking on the door of 2009 bull highs.

My range-based sentiment remains intact, however, until nosotros tin run across breakout forcefulness among the sectors together with the indicators above. (I volition encompass Cumulative TICK inward a kind post shortly). We maintain to run across waning upward momentum amidst stocks, every bit captured past times the Cumulative Demand/Supply Index (top chart); we're too seeing fewer NYSE, NASDAQ, together with ASE issues registering fresh 65-day highs. Even amidst the S&P 500 sectors, at that topographic point is mixed performance relative to the momentum highs of early on May.

This weakness shows upward inward the advance-decline trouble for NYSE mutual stocks, every bit posted past times the first-class Decision Point site. (By the way, their tracking of advance-decline lines specific to the S&P 500 sectors is peculiarly informative). Although nosotros striking a bull marketplace position high inward the NYSE Composite Index (bottom chart), the advance-decline trouble for NYSE mutual shares is lagging a bit. That lag is fifty-fifty to a greater extent than pronounced amidst S&P 600 small-scale cap stocks, suggesting a narrowing of the base of operations of this rally.

I volition involve to run across a broadening of that base of operations earlier final that Friday's forcefulness is the firstly of a fresh bull leg higher. Should nosotros neglect to sustain novel toll highs across the major indexes, I would facial expression a supply to good inside the trading gain defined past times the highs together with lows of the past times several weeks. As always, I volition post the major indicators to Twitter prior to the opened upward of each marketplace position day; free subscription via RSS here.
.

Info!! Indicator Update For October 19Th

Last week's indicator review institute that nosotros were seeing toll forcefulness inwards the major indexes, but signs of non-confirmations amid several indicators. This past times calendar week registered fresh toll highs, keeping most sectors inwards a bullish trending mode. Still, nosotros continued to come across non-confirmations amid the indicators. The Cumulative Demand/Supply Index (top chart) continues to register lower highs, indicating a loss of upside momentum.

We likewise are seeing fewer novel 20-day highs minus lows amid NYSE, NASDAQ, together with ASE stocks (middle chart), relative to the September levels. Similar readings are evident amid the 65-day novel high/low data. All of this suggests that participation to the upside has been to a greater extent than selective over time.

The advance/decline business information pigment a to a greater extent than mixed picture. We did register novel highs inwards the large cap indexes, including the A/D lines specific to the S&P 500 Index, the NASDAQ 100 Index, together with fifty-fifty NYSE mutual stocks. As the helpful nautical chart from Decision Point indicates (bottom), however, nosotros accept non seen similar novel highs inwards the A/D business specific to S&P 600 minor cap issues.

I proceed to stance this every bit a bull market. Note, for example, how pullbacks inwards the Cumulative DSI accept occurred at successively higher toll lows. Still, the indicators advise that nosotros may accept registered a momentum high inwards September, alongside recent toll highs coming on lower volume, lower momentum, together with reduced participation. If that is the case, I would await farther corrective activeness prior to whatsoever fresh bull leg.

I volition live on tracking marketplace momentum, trending, together with forcefulness each morn prior to the opened upwardly via Twitter. You tin follow the simply about recent 5 tweets on the weblog page nether "Twitter Trader" or you lot tin follow the stream of tweets (and subscribe gratis of accuse via RSS) past times going to my Twitter page.
.

Info!! Potential Fissures Inwards The Deport Marketplace Foundation

I'll live posting my amount indicator review this weekend; here's last week's review for reference. We're getting into the expanse where we're testing closing cost lows from January; whether those levels tin concord or non is the crucial enquiry facing traders inwards coming days.

Thursday nosotros saw 317 novel 20-day highs as well as 2268 novel lows across the NYSE, NASDAQ, as well as ASE. Influenza A virus subtype H5N1 fiddling farther out, nosotros get got 128 novel 65-day highs against 914 lows. Compare this alongside the 3943 novel 65-day lows at the Jan lows, as well as y'all tin come across that most stocks get got non exceeded those lows. Going all the same farther out as well as looking exclusively at mutual stocks that merchandise on the NYSE, nosotros come across that, on Thursday, nosotros had thirteen novel 52-week highs as well as 181 novel lows. That is the highest rank of novel lows since the Jan bottom, but banknote that at that prior bottom nosotros had 700 novel lows amidst NYSE mutual issues. Indeed, we're seeing many fewer novel lows straightaway than Jan across all major exchanges as well as indexes.

Meanwhile, we're getting oversold. Among S&P 500 stocks, nosotros are 1 time to a greater extent than seeing less than 20% of stocks trading to a higher house their 50-day moving averages, which has marked recent intermediate-term lows. Interestingly, we're seeing 22% of SPX stocks trading to a higher house their 200-day moving average, which is to a higher house the 14% rank seen inwards January--another potential divergence.

On the bearish side, we're seeing novel Advance-Decline lows for NYSE mutual stocks as well as S&P 600 small-scale caps, but non yet for SPX stocks.

To live sure, stocks are all the same weak; they could buy the farm weaker as well as all the same hold these divergences. My Demand figure unopen at twenty on Thursday, alongside Supply at 139. That agency seven times to a greater extent than stocks are trading below the volatility envelopes surrounding their moving averages equally trading to a higher house them. Still, my Cumulative Demand/Supply indicator, which has done a meridian project of tracking intermediate-term highs as well as lows inwards recent months, is nearing a purchase betoken at -23.

All inwards all it's prudent to hold off for signs of growing strength inwards the indicators earlier making major commitments to the upside. And I'll desire to come across simply about indications of confidence inwards fiscal stocks as well as credit markets earlier putting considerable adventure on the long side.

But brand no fault nigh it: the bearishness is thick. We've had position book exceeding telephone band book for equities for 5 consecutive sessions. The traffic on my website has 1 time once to a greater extent than swelled, equally at the March, August, as well as Jan lows. Back inwards July, when stock indexes were nigh their highs, the indicators were showing cracks inwards the bull marketplace foundation. Now we're seeing potential fissures on the deport side. That has me all the same quite cautious, but cook to pounce if as well as when the bears are forced to embrace their quite exposed backsides.
.

Info!! Indicator Update For July 6Th

Last week's indicator review institute that nosotros were trading inward a wide trading range, amongst farther weakness likely. We did indeed encounter that weakness belatedly inward the holiday-shortened weak, every bit the S&P 500 sectors turned bearish in addition to 20-day novel lows i time once again jumped ahead of novel highs. With downside momentum strong, farther cost weakness tin forcefulness out endure expected this coming week, which would select us testing the June cost lows at the depression terminate of the market's extended trading range.

Interestingly, our cumulative Demand/Supply Index (top chart) is solely nigh its aught level, indicating that nosotros are non nevertheless at intermediate-term oversold levels. Similarly, 65-day highs popular off along to outnumber 65-day lows (middle chart) in addition to stay stronger than at the June lows.

One argue that the indicators select held upward reasonably good into the recent weakness tin forcefulness out endure seen inward the advance-decline trace of piece of occupation for NYSE mutual stocks only, a really useful nautical chart posted past times Decision Point. We stay good off the June lows for the A/D line, raising the interesting possibility of a non-confirmation should nosotros dip below the June cost lows inward the major averages.

Quite a few marketplace participants are focusing on the seeming head-and-shoulders designing inward the S&P 500 Index since May's highs. Influenza A virus subtype H5N1 suspension of the May/June neckline would no doubtfulness convey sellers to the fore. It's at that indicate that nosotros would encounter if this is to a greater extent than than a shallow correction of the strength we've seen inward stocks since March. From the acre of the indicators at present, it's non clear to me that we're virtually to come inward a prolonged behavior phase. As always, though, I'll endure tracking the indicators daily earlier the marketplace opened upward via Twitter (follow here) to justice marketplace strengthening in addition to weakening.
.

Info!! Tracking The Footprints Of Provide In Addition To Bespeak Inwards The Stock Market

In approximately ideal, dispassionate basis all participants inwards fiscal markets would acquit similar my friend NRK too solely purchase at bid prices too sell at offers.  It's a groovy agency to create good inwards auction markets, too in that location are optimal execution platforms that volition make that for large marketplace participants.  The employment amongst optimal execution is that y'all oft cause got to hold back to buy the farm expert prices, too cost tin buy the farm away from y'all spell you're waiting.  That tin hap if you're looking for a manage inwards a hot existent estate marketplace or if y'all essay entering on boundary orders inwards a fast market.  

The truth of the thing is that the basis is neither ideal nor dispassionate.  People chase cost bubbles too puke out of positions when everyone else is doing the same.  Real basis traders--and fifty-fifty those execution systems--recognize this too allow for execution amongst urgency.  When markets are moving amongst signs of momentum, it's acceptable to elevator offers too hitting bids to participate inwards the movement.  Of course, inwards this less than ideal world, there's also that modest inconvenience called cognitive bias.  We all also oft extrapolate direct lines too remember that every displace higher or lower is a budding trend.  That gets us executing amongst urgency to a greater extent than oft than genuinely objective signs of momentum would dictate.

The long too curt of this foray into the vicissitudes of determination making is that fifty-fifty the largest marketplace participants larn out footprints equally to their intentions.  Yes, they tin chop orders upwards into pieces too execute inwards baskets too merchandise on dissimilar exchanges.  At the halt of the day, however, their transactions occur inside a bid/offer matrix, too they are either executing amongst urgency or they are not:  they are either willing to pay the seller's cost or they're willing to allow markets sell downwards to their desired buying level.

When y'all analyze markets transaction past times transaction, y'all tin really come across the stream of trades too book hitting bids too lifting offers--and y'all tin rail the evolving sentiment/urgency of marketplace participants.  That is highly useful data that is obscured past times looking at traditional intraday or daily charts.  H5N1 daily nautical chart is a telescope, revealing a large picture.  Viewing markets transaction past times transaction to discover the flows of trader behaviour requires a microscope.  H5N1 major fault that traders brand is attempting to engage inwards microscopic analyses past times changing the magnifying ability of their telescopes.

Above is a nautical chart that tracks a mensurate of "volume flow" that I've spent the amend business office of this weekend constructing.  It looks at every merchandise for every stock inwards the NYSE universe too identifies where the transacted cost occurred inside the bid/offer matrix existing at that time.  If the book of that transaction occurred nearer to the bid price, it is considered "selling volume".  If the book occurred nearer to the offering price, it is considered "buying volume".  The book stream mensurate is a running full of buying vs. selling volume.  If y'all remember of it equally a volume-weighted NYSE TICK mensurate or equally a cumulative Market Delta for all stocks, y'all wouldn't last far off the mark.

Much equally I dearest the TICK measure, it is democratic to the indicate of promiscuity.  All upticks too downticks are equal, whether they stalk from the smallest microcaps or the bluest of bluish chips.  That is non hence helpful when trading a capitalization-weighted index.  You tin cause got relative forcefulness or weakness amid modest caps equally business office of a sector rotation that volition skew the TICK measure--sometimes considerably.  H5N1 volume-weighted TICK measure, on the other hand, naturally weights larger, to a greater extent than actively traded issues to a greater extent than highly, providing a potentially amend supply/demand see for the stocks that thing inwards the index beingness traded.

Note to a higher house how selling flows were quite moderate inwards early on merchandise too hence accelerated fifty-fifty equally cost was topping out for SPY.  This is potentially useful data for the intraday trader.  

As I operate amongst the novel measure, I promise to portion farther findings too details.  The of import takeaway is non nigh the specific measure--it may or may non add together value over time.  Rather, what is of import is looking at markets inwards fresh ways too sustaining a procedure that periodically renews too extends your perspectives.  Looking at the same charts too indicators equally everyone else is a groovy agency of replicating the returns of everyone else.  If y'all wishing distinctive returns, y'all demand to see markets through distinctive lenses that break fresh opportunities.  It used to last that dependent meant next a exceptional develop of rules or processes.  In crowded, ever-changing markets, however, creativity is the novel discipline.

Further Reading:  Why to Keep a Journal
.

Info!! Staying On The Correct Side Of The Market

Let's outset amongst a 2nd of review:

The NYSE TICK ($TICK) is the set out of stocks trading on upticks minus the set out trading on downticks on a high frequency basis.  (It's updated nearly every 2nd on my platform).  It's a sensitive mensurate of marketplace forcefulness in addition to weakness, because it captures the residue betwixt stocks trading strongly (on upticks) or weakly (on downticks) throughout the day.  Very oftentimes we'll run into diminished buying ahead of marketplace tops in addition to vice versa--a useful heads up.

Another agency of looking at the information is to hold out yesteryear along a running full of upticks vs. downticks through the day, like to an advance/decline line.  So we're adding the $TICK readings over fourth dimension in addition to observing changes inward buying in addition to selling from the direction in addition to gradient of the resulting line.  

Above nosotros tin post away run into the Cumulative TICK draw of piece of job for yesterday, Jan 24, 2017.  Notice how, early on inward the session, nosotros started amongst buying involvement in addition to steadily moved higher through the day.  In other words, buying involvement was dominating selling involvement correct out of the gate.  Seeing that lopsided demand/supply province of affairs provides us amongst useful information to ensure nosotros remain on the correct side of the market.

Our labor every bit traders is to read marketplace patterns in addition to brand decisions accordingly.  Our labor is non to impose our frameworks on markets in addition to merchandise inward ways that gibe our theories (and that volition brand us human face smart).  Are you lot next the market, or are you lot expecting the marketplace to follow you?  Very often, that's the departure betwixt successful in addition to unsuccessful trading.

Further Reading:  Tracking the Market amongst US of America TICK
.