iBC Machine Daily Market Stats — 12/1/2008
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[click on all charts to enlarge]
Volume-Weighted Average Price Lines (1 hr chart)
SPY
Support at 815 and 800
XLF
QQQQ
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Intraday LoBVâ„¢:
15 minute chart
Definition: This custom indicator measures the number of stocks and the distance they are from their respective moving averages. It is a reversion to the mean indicator in that if a large number of stocks are a large distance from their respective moving averages (in any direction), it often portends and predicts a reversal.
My Interpretation: The blue line in the second pane (Slow Line of the LoBV) isn’t low enough to be considered severely oversold. Also, you want to wait until the blue line begins to at least flatten out or slope up before getting bullish on intraday equity prices. In other words, the LoBV of < 1 (grey line) is low, but it is likely to stay there for a day or more before rebounding.
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Daily LoBVâ„¢:
Definition: The same thing as the Intraday LoBVâ„¢, except it measures the number of stocks and the distance they are from their moving averages on a daily basis, rather than an intraday basis.
My Interpretation: Nothing notable, except that I nailed the lack of breadth participation call in this indicator in last Friday’s update.
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iBC Daily Buy / Sell Strengthâ„¢:
Definition: Counts the number of stocks feeling “joy†or “pain†(as I’ve quantified it) to sum up the zeitgeist of the day. This is akin to blood-pressure, or pulse, in that a person can look one way on the outside, but have an entirely better (or worse) situation going on internally.
My Interpretation: Largest sell strength of the entire year. 2nd largest was 9/29. What followed was the worst month since the dawn of the capitalist age.
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iBC Daily Buy / Sell Lineâ„¢:
Definition: Is an oscillator of the Daily Buy / Sell strength to see which theme is dominating the market on a weekly basis
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The market has a chance to show everyone wrong tomorrow to the tune of a 5+ percent move, or decisively above 865, but I think it’s likely we visit the old lows, possibly even making new ones over the next week or so. A small bounce without a strong, life-affirming snap-back rally is just consolidation before, imo, more downside.  The VIX made a huge move today as well, and I think counts as a “famous Gio VIX spike.”
It feels “precipice of a cliff like” out there, but as WTA (up 27% in a day!) observed, the volume should pick-up here. If it can’t, I am on my toes for a short squeeze bounce, but I still get the distinct feeling that the Market is contracting the Peruvian Waterfall shits, and that grumbling in my belly is something you just can’t ignore. Short the bounces!
If you are going to trade, stick to your rules and stick to your stops.
Good stuff.
Even though we could point to somewhat low volume, the selling strength was indeed incredible. If I recall correctly, based on previous days like this, the next 5 days or so should involve extremely bad market juju. Or in other words, the whole month could be shit, but the next few days should be the ones that make people puke up their portfolios.
I’ll use my remaining leverage to short any bounces (that don’t exceed the open-close range of today’s candle)
Closed out my shorts today from Friday with some nice $ to show for it.
Content to watch the madness for a little while.
This market is definitely long on opportunity!
Ozark - there is much bad juju out there
CA - yup
Leo The Monkey - I love opportunity
I agree … stupid bounces are to be sold. new lows shortly , unfortunately, but thats the way it is.
Caruso Carrera Colostemy Bag.