Not much time this morning to get into the specifics of these indicators. If you want to read more about them, their thresholds, how they are constructed, etc., then explore previous posts here.
I have circled the latest readings to make things easier.
A brief synopsis of what I expect over the next few days: We bounce soon (starting today, likely) and it lasts for a few day to a week.
Hit me up with any questions in the comments.
16 Responses to Breadth Says, “Let’s Bounce, Shall We?”
It should be an interesting open.
The Dollar is strengthening.
Both the Yen and Swissie are giving up ground, while only the Pound appears to handle the tape without great volatility.
With Europe on lunch, it looks like their open’s reprieve will follow Asia’s down day.
No “Global Handshake” so far (Tom Busby).
It will be an interesting print for the day.
I suspect some kind of rare doji such as a gravestone or dragonfly doji.
BRA, I was expecting a doji with a slightly higher close.
Today is Yom Kippur. Don’t we sell today.
I’m almost always comforted by these posts, so thanks for the update.
I demand more detail.
Sorry. It was too early in the a.m. for details…
I hope so…
Hi. I like the indicators you use here. I have one query. How would you have utilised this in July and august 2011 as the market decline then was waterfall like. Buying for a potential bounce was tricky for me personally.
Buying dips, whether buying a dip due to breadth or any other indicator, will not always work. Sometimes you will buy a waterfall. IMO, when buying dips, one should sell into strength, which means you might have to sit on a loss until the bounce occurs and even then with a waterfall you will still have a loss.
You could use a stop, but then in the case of the waterfall, when the stop triggers, it is likely the dip is still buyable, so what does one do? Wait for strength to reset the waterfall process and then buy the next dip?
I’d rather hold on through the waterfall and sell on the bounce that inevitably occurs.
But you’ve got me doing some thinking about this issue so I’m probably going to work up something a tad more scientific.
Thanks for the reply. Much appreciated. If you can come up with some thoughts on what filter one could use to not buy a waterfall dip v “Normal dip” then that would be great. Normal dips for sure will have their share of losers but I would really like to avoid waterfall declines or on the flipside shorting a parabolic rise.
Great work as always! Quick question… have analyzed / back tested the technical outside candle we saw on Tuesday? I am curious how the market performs 1week, 2week, 1month out after experiencing a large outside day.
If you’ve already completed this test, please send me the link.
Thanks! I have not backtested that, but it is a decent idea so I will take a look at it sometime soon.
Thanks Wood! Looking forward to your results.
I was wondering where you get the # of stocks above their 5DMA data…is there a service that provides this data in real time or do you roll your own?
Hi there Anon. I roll my own. I use Amibroker with a data feed from Norgate Premium Data.