Info!! Making Feel Of A Weak Root To A Novel Year

I thought I would update a few of the measures that I follow to help us brand feel of the relative weakness that we've seen ushering inward 2015.  In the grand system of things, the weakness is non extreme; indeed, my Cumulative NYSE TICK stair out has made novel highs as well as advance-decline breadth has non been lopsided at all.  Still, the weakness has exceeded my expectations; the charts inward a higher house capture a worthwhile perspective.

First, however, a trading psychology comment.  When I'm stopped out inward a trade--as happened lately with my long seat inward ES--I stop.  My stops are placed far plenty away that, if they're hit, I'm wrong.  And earlier I resume trading I demand to figure out what the hell I got wrong.  One of the some destructive patterns I've observed alongside traders is a style to continue--or fifty-fifty accelerate--trading later halt outs.  Insanity, the maxim goes, is redoubling one's efforts later having lost sight of one's aim.  Influenza A virus subtype H5N1 to a greater extent than sane strategy is to role losing trades equally learning experiences.  The charts inward a higher house are business office of my review as well as reflection procedure later a merchandise that I thought was skillful turned out to live on a losing one.

The top nautical chart is a stair out of breadth for SPX stocks.  It represents the pct of shares trading inward a higher house their 3, 5, as well as 10-day moving averages.  (Data from Index Indicators).  You tin post away run into how this breadth stair out reliably tops out ahead of toll during marketplace cycles; it's also done a reasonable project of bottoming ahead of toll at wheel troughs.  We've come upwards off quite sharply inward this measure; to a greater extent than thence than is typical inward a marketplace cycle.  This invites the hypothesis that we've already seen a momentum peak for the electrical current cycle.

The middle nautical chart tracks all NYSE stocks closing inward a higher house their upper Bollinger Bands vs. closing below their lower bands.  (Data from Stock Charts).  It also has shown an admirable style to top ahead of toll at wheel peaks as well as ahead of wheel lows at troughs.  That has non come upwards off equally sharply equally the breadth measure, exactly also has moved steadily lower since a rapid peak off the mid-December bottom.

Finally, the bottom nautical chart tracks a handbasket of stocks that are institutional favorites as well as the upticking versus downticking inward those stocks.  When the bulk of stocks inward the handbasket uptick simultaneously, that is deemed to live on bear witness of the presence of institutional buying programs; when they downtick simultaneously, that is counted equally the presence of selling programs.  We tin post away run into that buying programs dominate early on inward a market's wheel history as well as give means to selling programs equally markets brand cyclical peaks.  Note how nosotros showed real rigid buying programme activeness off the Dec lows as well as at in i lawsuit accept moved to a potency of sell programs.

These measures acquire out me opened upwards to the thought that we've hitting a momentum peak for the electrical current cycle, which volition accept me looking closely at whatsoever bounces from hither to run into if nosotros run into waning or strengthening breadth.  This could accept longer-term ramifications, equally it invites the hypothesis that the destination of yr describe was non a fresh leg inward a bull marketplace exactly rather business office of a much larger topping procedure that began inward 2014.

Further Reading:  Losing Your Money Begins With Losing Your Focus
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