Contrary to many market technicians, I pay a great deal of attention to breadth measures of the
NYSE. One example is to follow a 6 week m/a of advances. Over the years, the work has shown
that when the 6 week m/a does drop down to 1100 issues or a bit lower, the stock market is
significantly oversold and ready to rally $NYADV (Over 3,000 issues are traded.)
As often happens, the trend of advancing issues is strongest in the early stages of a rally and
tends to tail off as the rally progresses along. The chart shows a well established trend down is
in place for the 6 wk m/a, which at 1281, is still well above the 1100 level. I do not know now
whether advances will fall to the 1100 level soon, but that is where I would be most comfortable
going long for a trade with significant positions.
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