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Friday, August 16, 2019

Update 8/16 Negative Is The New Subprime


There was no bad news to keep the bulls from capitalizing on yesterday's test of the 8/5 low.  Breadth was +76%.  The volume was 88% in up stocks which is very good.  Another day like that might end the correction. 

The futures rebounded nicely, but remain below the 200 SMA.  We don't have a green bar on this rally attempt yet.  The DI lines still do not have a positive cross.  In other words, the bulls still have work to do.

The red barely turned down and remains above 50.

Today's rally is a good start on a turnaround, but there is still work to be done.  The bulls need to keep the buying pressure up next week.

I have always thought the NYSE tick indicator held the key to real buying and selling pressure.  I tried for nearly two decades to figure it out on and off.  However, I just could not get it.  I was recently made aware of a way to look at them to get the very information I was after.  After studying much history I have determined it works.  The ticks can give amazing buy and sell signals.   The market can go for months after a buy signal with no sell signals.  The signals usually happen very near the high and low of important turning points.  There was a buy signal on 6/3 which was a down day and the final low of the pullback.  The market rocketed up the next day and kept on going.  For the lack of a better term I will call these signals tick buy and sell signals.  How creative is that!  In our current situation there was a sell signal on 8/1 after the tariff tweet.  None of the big rally days (including today) have given me a tick buy signal.  There was a fresh sell signal at the low yesterday.  That may turn out to be a sign of capitulation after today's bounce, but that remains to be seen.  With this setup a buy signal could produce a decent rally.  Until that happens we need to be alert as the market could still roll over and make new lows.  I will do updates on the days I see a signal.

I really do not understand why the pundits act as if all the negative rates on global bonds is perfectly normal.  Not a problem at all.  Some people even try to say it is a positive.  If negative rates are so good why is the European economy bordering on recession instead of flying high?  Here is a more realistic look (at least the way I think) at it.  Negative Is The New Subprime

Have a great weekend.  Peace.


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