Market Internals 2012-03-04
By Lawrence3-Day Advance Issues continue its bullish trend and refused to correct its overbought condition.
Tick16 ST have corrected its overbought condition and is now down at oversold level.
Tick16 LT is moving near the neutral zone.
Historically, there are several times where S&P can correct its internal overbought conditions without having a correction in price level. That is the beauty of custom market breadth indicators. They can give you the trading setup and also warn you that the strength of the signal is about to expire.
If Tick16 LT sucessfully bounces off the neutral zone, the sell setup based on normal overbought condition will be gone.
On the other hand, if Tick16 LT continue to deteriorate into bearish mode. Then next Tick16 ST kiss of neutral zone will likely be the coffin nail on this rally.
The bottoming of the TICK16 LT proven deadly to the shorts and it has bounced off neutral area.
Short term overbought in both TICK16 ST and 3-Day Advance Issues should provide us a pullback.
Potentially back to bullish long mode again if this pullback is not deep enough to damage the weekly chart.
The breakout above 1370 area destroyed the topping formation.
Back to bullish long mode since.