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Market Internals 2013-04-19
My monthly update on market internals.
The current snapshot of S&P 500 3-Day Advance Issues, Tick16 Short Term + Long Term as of 2013 April 19 close.
Reading
1. Long Term Tick16 (yellow line) below neutral zone.
2. Short Term Tick16 (red line) moved into oversold zone.
3. 3 Days Advance Issues (green line) diverged from new low printed by S&P
Inference
a. #1 is bearish pointing to trend sell mode
b. #2 points to a bounce is due until the line is back to neutral zone
c. #3 strong new momentum low points to start of down trend, or as a minimum end of the current up trend. The divergence points to a potential short term bottom in the making.
Last update predicted a swing long was coming. I did not expect that turning into a major short squeeze / blow-off top off the double bottom in the 3-day advance issues.
The current selloff in progress now is different from the previous one as the strong new momentum low in 3-day advance issues usually points to significant down side risk. Thus counter-trend long should be taken with precaution that they may fail easily.
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