Market Internals 2012-09-19

The current snapshot of 3-Day Advance Issues, Tick16 Short Term + Long Term as of 2012 Sep 18 close.

Yes, am posting the chart 1 day late.

Reading

1. Long term Tick16 (yellow line) in bearish zone

2. Short term Tick16 (red line) recovered to above neutral zone with S&P printing year high

3. 3 Days Advance Issues (green line) divergence top forming BUT refusing to go below neutral zone

Inference

2 opposite outcomes are expected from here –

1. Major top in the making with S&P dropping at least 10 to 15% quickly

2. The distribution witnessed by TICK16 represents significant money outflow from the stock market. If these money somehow due to external pressure being forced back into the stock market, we get a quick push to all time high before year end

The external pressure I am talking about is how people react to the Fed decision of QE infinity. This is a major wild card as no central bank has ever tried so hard to destroy wealth. Well, specifically destroy wealth of the middle class and lower class population around the whole world.

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