Market Internals 2011-11-20
By LawrenceSince last update we got our pullback based on market breadth.
Well, there were actually 2 pullbacks with one very fast melt up in between.
3-day advance issues gave us the extremes with early warning on all of them so they did not catch us by surprise.
The last selloff over the past few days started from also Tick16 Long Term turning bearish. That makes it easier to ride it down to the support zone by Friday.
The problem right now is that Tick16 Short Term is back to neutral zone and that Tick16 Long Term is decidedly bearish. It is a 50/50 formation where the market can choose to bottom here and start to zoom up big time, or, with just a pop slightly higher after the current 3-day advance issues oversold condition is used up, then dump to a significantly lower price level.
I will monitor the breadth model much more closely over the coming few days as that will give us a clue if the expected pullback from the latest sell off will turn into full form rally or not.
The tick indices turned back up above neutral zone. A zoom up is now in play.
ES dropped thru its support zone of 80 area.
The next level below is mid 40s before all out collapse down to 1100 area where another gap is waiting.
Today the fight at mid 40s will be important if ES is going to find a bottom.
What gap around 1100?
Sep 10 – 13 gap 1104 top 1110
Early in Sep there is another one right below too.
SPX low for September 10-13 was well above 1104-1110.
Price went below 1105 only three times, and no gap in any of those three.
My bad – that is the original break out / gap area from last year (2010).
The gap below that from last year (early Sep 2010) in the 1080-90 area turned into the spring board this year but created a new gap at 1065 area.
I kept all the lines drawn on the chart using the same color for gaps – reason for the mix up.
I guess that does not matter now because ES is up freaking 20 pts now due to the announcements by IMF and euro zone leaders.