Info!! A Hold Off At The Recent Buying Surge

The recent post noted the drying upwards of downside breadth inwards the stock market, fifty-fifty equally nosotros were posting fresh cost lows.  I said at that fourth dimension that I would hold upwards surprised if the bottoming procedure were over, only that I'd hold upwards on the sentry for continued signs of strengthening breadth.  Well, I was surprised, as well as nosotros for certain convey had the strengthening breadth!

The charts higher upwards document the recent surge inwards buying interest.  The Buying Power measure, which is derived from a mensurate of the publish of upticks alongside NYSE shares, has hitting its highest degree since I began collecting those information inwards early on 2012.  Over that same period, short-term breadth alongside SPX stocks has moved from deeply oversold to strongly overbought (middle chart), which is reflected inwards the radical shift inwards the shape of the Momentum Curve (bottom chart; the percentages of SPX shares trading higher upwards their diverse moving averages).

As nosotros tin come across from the middle chart, surges inwards breadth from oversold levels tend to demo momentum:  farther cost gains fifty-fifty equally breadth wanes.  Many investors as well as traders convey missed this "V-bottom", as well as that provides powerful incentives to purchase the commence dips.  

Further Reading:  Institutional Participation as well as Momentum
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