Info!! Indicator Update For October 20Th

Last week's indicator review concluded, "I volition take away to run into bear witness of a drying upwardly of selling line per unit of measurement area earlier in conclusion that the worst is over for stocks. Thus far, every indicator tells us that weakness has been expanding, non drying up." This past times week, nosotros saw a dramatic motion higher inwards stocks, followed past times an close as dramatic motion downward, as volatility continued at extreme levels. So how cause got indicators fared?

Money menstruum has continued weak in addition to the advance-decline figures propose that no broad-based cost forcefulness is however evident. The cumulative Demand-Supply Index (top chart), which cumulates the daily index of stocks closing higher upwardly vs. below their volatility envelopes, remains at oversold levels, albeit off its recent lows. Similarly, nosotros run into weakness inwards the give away of stocks registering fresh 65-day highs vs. lows (bottom chart), exactly these numbers are too good off their lows. For example, nosotros had 107 novel 20-day highs on Fri against 383 novel lows. At the market's momentum depression to date, nosotros registered over 6500 novel 20-day lows across the NYSE, NASDAQ, in addition to ASE. Also good off its momentum lows is the cumulative NYSE TICK.

Thus far, I am working amongst the next assumptions:

1) The marketplace made a momentum depression for the recent acquit move, in addition to nosotros are straightaway inwards the procedure of bottoming;

2) Significant marketplace declines (1974, 1981-2, 1987, 1990, 1998, 2002-3) cause got taken weeks to months to bird bottoms, in addition to the electrical flow bottoming procedure could hold upwardly similar;

3) Given the electrical flow volatility, whatsoever marketplace ascent from such bottoming could hold upwardly quite sharp;

4) While such bottoming may select a meaningful intermediate-term low, it is non at all clear to me that we've seen the ultimate lows for this secular acquit market.

What this way is that nosotros could run into to a greater extent than broad, range-bound, whippy activity as markets seek an intermediate-term bottom. Unless I run into breakout forcefulness inwards such indicators as coin flow, NYSE TICK, in addition to novel highs/lows, my leaning volition hold upwardly to fade abrupt marketplace rallies, exactly too to fade tests of recent lows that are accompanied past times non-confirmations inwards these indicators.
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