Info!! Riding Trends Through Countertrend Trading

I late posted a mensurate of intermediate-term marketplace strength besides equally moving average crossovers.  Above is a short-term mensurate of breadth specific to S&P 500 stocks that I accept constitute helpful.  As amongst the intermediate measure, the raw information are from the Index Indicators site--shoutout to Mo Shaarani for a rattling useful site.  I archive the information in addition to build the indicator in addition to nautical chart it inside Excel.  

This short-term breadth mensurate consists of a daily average of the per centum of SPX shares trading higher upwards their 3-day moving averages, their 5-day moving averages, their 10-day moving averages, in addition to their 20-day moving averages.  So when the index approaches 100, the vast bulk of shares are inward uptrends over all of those short-term timeframes; when it approaches 0, the vast bulk of shares are inward short-term downtrends. 

Interestingly, when the breadth index closes below 30, since 2013 the adjacent five-day gain inward SPY has been 1.25%, nigh 4 times the average gain for the residue of occasions (.33%).  It's a smashing representative of how markets that expect in addition to experience the worst--and that trigger the most stops for long positions--end upwards having the best near-term returns. 

Imagine short-term cycles superimposed on a long-term upward trend:  that is the marketplace we've enjoyed for the final duad of years or so.  In such a market, it makes a lot of feel to travel a tendency follower--but to larn inward long positions inward a countertrend mode.  

Further Reading:  Breadth equally a Market Tool