The Lawrence Chan Blog

Monthly update on market internals.

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

Reading

1. Long Term Tick16 (yellow line) tagging neutral zone from below

2. Short Term Tick16 (red line) back up at overbought zone forming two divergence tops against S&P new high. One spans 10 days and the other spans 3 days.

3. 3-Day Advance issues (green line) dropped down to neutral zone after divergence top against S&P new high

Inference

a. #1 is neutral

b. #2 points to short term top in the making

c. #3 a short term top will be in place if 3-Day Advance can go negative. A bounce off neutral zone can be a very powerful buy signal so there will be a big fight to control the outcome

Review

Inference from last update worked out well:

– S&P formed short term bottom right at the beginning of the following week

– rally from the short term bottom did not make it to 50% as it dropped lower first

The long term outlook mentioned that where S&P will be heading depends on the 3-Day Advance formation. By end of August / early September we’ve got the divergence bottom in place resulting in one strong rally.

Long Term Outlook

The other long term breadth data I have also points to major divergence against this S&P new high. Historically there are 2 ways to resolve such divergence. First is a quick deep sell off of 10% or more. Second is a 5% sideway move with extreme volatility.

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One of the better video online explaining how our financial system works. Definitely better than any nonsense from classic economic theories.

You can find the draft paper from http://www.economicprinciples.org/

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Dr. Jem Bendell’s take on our financial system back in 2011.

As he mentioned in the video, the movement to ditch the money created by the bankers has started. It is something that cannot be reversed as government officials continue to work with the bankers instead of the people who elected them. When more and more people reduce the direct impact of money on their lives, the equivalent monetary activities will disappear and the multiplying effect will reverse.

As these movements gather more support over time, it is reasonable to expect the current financial industry will be wiped out from our future for good. Well, wipe out is a very scary term, so let’s say the financial industry will be reduced to insignificance in a not so distance future.

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When I was revising the article section, somehow the articles on tech tips are not grouped into its own home page at all. Well, I found out about that today when I tried to link my article on UPS to the review of the APC Smart-UPS. So here it is, the tech tips section is now ready.

Go check it out yourself =)

https://www.daytradingbias.com/?page_id=103751

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This video is not one of those directly related to trading. Instead, it is a thought provoking video about our world and the current economic model.

As more people take the stand like Mark Boyle, a reasonable country would response by cutting down its spending and stop wasting because tax income from these people will never come back.

Yet we know the governments we have nowadays would instead spend more to see if they can stimulate the economy. Some may even take the extreme measures to suppress these movements by force. It is something very bad. All our governments should never try but they already started.

This moneyless movement is no difference from the Bitcoins movement in the eyes of the ruling class. Both refuse to follow the rules set out by the governments. Both can have profound effects in constraining the power of the governments. Both are dangerous ideas.

The worldwide financial landscape is changing rapidly as more people thinking about solutions to terminate the stronghold of the banksters. It does not matter that the governments are not doing their jobs to hold the bankers accountable. It will take only one idea to break the current financial system worldwide and force a complete reset of the world order.

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