Info!! When 5 Bottoms Are Non 5 Bottoms

Well, hither nosotros larn again:  around other V bottom!  Stocks rallied sharply yesterday together with are upward substantially inwards overnight hours to add together to gains.  But peradventure V bottoms are alone V bottoms if nosotros focus on price.  Might in that place move changes inwards momentum patterns that precede the toll reversal?

Above are a few things I've been focusing upon.  The transcend nautical chart is what I telephone outcry upward the momentum curve:  it depicts the percentages of stocks inwards the SPX universe that are to a higher house their 3, 5, 10, 20, 50, 100, together with 200-day moving averages over the yesteryear several days.  (Data from the Index Indicators site).  What nosotros tin sack run across is that the percent of stocks trading below their shortest moving averages (3 together with 5-day) truly bottomed ahead of price.  (They truly striking their lows on 12/10).  There was no V inwards short-term momentum.

In the middle chart, nosotros rail the expose of NYSE stocks closing to a higher house their upper Bollinger Bands vs. those closing below their lower bands.  (Data from the Stock Charts site).  The expose of stocks closing below their bands peaked on 12/12 together with did non confirm the actual toll lows.

In the bottom chart, nosotros rail the expose of purchase vs. sell signals across all NYSE stocks for the Commodity Channel Index (CCI).  (Data from the Stock Charts site).  It, too, striking its lowest downside signal on 12/12, prior to the toll lows.  

What I'm seeing is that, recently, tops accept been distinguished yesteryear toll divergences; bottoms accept been characterized yesteryear momentum divergences.  It's an observation together with hypothesis alone at this point, only 1 that warrants farther investigation together with testing.

Further Reading:  Bollinger Balance
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