Thursday Market Breadth
Thursday, November 12, 2009 at 11:49 pm
Here, lets go interactive…
Post your interpretations of this chart in the comments between now and market open.  It’ll help you read it if you spend a minute thinking about what it says.  Also, like with most breadth indicators, it is best used as a context with which to frame your trades, not as a buy/sell indicator itself (although I couldn’t help but color-code it as such).
Tell me how you view the context of this chart right now.
OK, this newbie will take a stab:
On today’s 1% decline the sell strength was only 151 versus Oct. 28 when there was a sell strength of 864 on a 2% decline day. The breadth expansion is still declining. The market didn’t seem to be making an effort
to head up to SP resistance line today. So that would say to me that from this chart things look bearish– but even more than that, it looks like a market that is lacking much energy to do anything big tomorrow period.
It looks like it could head slowly down just because it doesn’t appear to have the energy to move up.
Danny- since I’m just starting to learn to analyze your charts– can you please comment what I’m missing/saying wrong etc. thanks, Lindsay
That looks like a good analysis to me Lindsay.
I would break it into three parts:
Overall: Price is green and therefore bullish.
Few weeks: we flipped from red to green, and we haven’t been red since Feb. There was definitely huge selling in that last dip such to turn my market conditions to red. This plus other divergences are cracks in the armor.
Few days: The last little clump of green bars relative to todays red shows more accumulation than distribution. Esp if you compare the 151 reading to the sell readings leading into the last decline (multiple +150 says back to back)
today (yesterday): pick up in selling relative to prior couple of days, but not a large one day distribution.
Thanks Danny. So appreciate how you and the team keep teaching us newbies. I love ibc.
http://www.sosmath.com/calculus/geoser/bounce/bounce.html
WHERESMYGRAPENEHI?
I think Fly has it stashed until you give him his root beer.
that was a hilarious answer MS
I see a successful test down.
Anyway, another newbie here. Stupid question alert.
What is breadth exactly? I searched for it, but found nothing exact. It seems to me everyone uses “breadth” with different meanings. Could anyone point me in the right direction? Any book, or website?
Zood– Investopedia is one site that can be helpful
http://www.investopedia.com/terms/m/market_breadth.asp
Thanks a lot.
I read a lot of books lately (the ones I could find recommended by CA, for example, plus a bunch of other ones too). Wish I could sleep only 4 hours a day like CA… so many books, so little time.
iBankCoin is a real gem, with all the experienced and honest traders. If you want to learn something, you have to learn from the masters. Its so hard to find honesty in this huge internet junk, filled with false prophets and simple idiots.
Plus, the bloggers here have style.
You are so right.
I say it pops, then cracks for a 15% - 20% decline. I think it will definitely tell us next week though. This past Wednesday we had 251 new highs, the prior Wednesday we had 64. Friday we had 131 new highs.