Market Internals 2013-11-22

By Lawrence

Monthly update on market internals.

The current snapshot of S&P 500 3-Day Advance Issues, Tick16 Short Term + Long Term as of 2013 Nov 22 close

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Review

Tick16 breakout mode gave us breakout to the upside.

First Tick16 short term overbought against Tick16 long term bearish gave us a brief pullback as I mentioned that in real-time chat. This setup worked out in coordination with the 3-Day Advance Issues divergence setup.

And right after the pullback, it turned into a powerful buy signal as mentioned last time.

Reading

1. Long Term Tick16 (yellow line) bearish

2. Short Term Tick16 (red line) still have room to go back up to at least the long term line and more likely the neutral zone. This is bullish.

3. 3-Day Advance Issues (green line) in 2 way swings

Inference

a. #1 is bearish longer term (4 to 6 weeks)

b. #2 more room to go for the upside

c. #3 distribution in progress

Long Term Outlook

The 1998 scenario played out. That means we are likely getting an early year end rally and until the Tick16 short term reading is overbought, it is not time yet to fight the uptrend on swing basis.

The way 3-day advance issues swinging both ways is great for day trading.

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