Monday, February 08, 2010

More evidence

Here is some more evidence that Friday's low ended the correction which started from the 1148 high in the ES. These two charts show the 5 day (purple line) and 10 day (red line) moving averages of the number of issues traded on the New York Stock Exchange which advance in price. Notice that both moving averages were higher last Thursday and Friday than at their low points of the previous week - yet the S&P 500 was lower than its previous week's low. These are bullish divergences. Coming as they have after these indicators dropped to "over sold" levels these divergences are more evidence that the correction has been completed.


RBharol said...

That is why I think Stock market analysts are no better than Astrologers.. EW counters think markets is headed lower while some think it is headed higher...

Astrologers do the same.

RBharol said...

What is your opinion on money flowing out based on this chart?

Laurence said...

Market breadth as measured by $NYSI presents a completely opposite picture to what you are saying, it has taken out the July low already while the S&P is significantly higher. A huge negative divergence.

Kishore said...

Retest of 1941 is very probable. Since the retracement level to 1068.50 was 50%, which is WAY BETTER than the 38.2% we have been seeing so far during the decline, there is only a 50% chance of the support at 1941 being broken. Maybe, it will break another time!

Kishore said...

TeleChart's T2100 (Adv/Declline), T2126 (NASDAQ Adv/Decl), T2118 (McCallen Summation) all look very bearish. Only T2106 (McClellan Osc) has a slightly positive divergence.

I watch these indicators quite regularly. There is no positive divergence of any significance.

egnard said...

Technical analysis of the markets in the short/intermediate term is one thing, but personal consumption largely drives this economy. Over the past few months markets have dipped negative when job reports are not good. I think the fact that the stimulus money is not creating enough jobs has caught up with the market. So I don't see things going much higher until a significant number of jobs are being created. That's what I am looking for (and millions of others). We may be leveled off (with fluctuations) until that happens. But I am neither an economist, nor a short term investor.

janet said...

Looks to me like the 200dma wants to be tested...I think we continue lower for now

Smarty Pants said...

This hammer with a very long handle is vert rare and very bullish: Will we confirm it ? We must close above it or equal:$SPX&p=D&yr=0&mn=6&dy=0&id=p15193950534&a=104505899

Kishore said...

The tardy bulls will need this hammer, to hammer out their brains, when the the bottom falls out.

KBlaine said...

Thought you would like this headline.

jeff said...


I appreciate your analysis and will take it into consideration. For me, I believe Wave B down is complete as part of a smaller wave ii retracement. Tomorrow will be Wave C up into the 1075-1083 range and from there, a larger Wave III down will carry us down below 1000 on the S&P in the next week or so.

To show you and folks I will not stay married to my shorts, I will put a stop if we exceed the 1100 level anytime soon.

Despite respecting your conviction to the long-side, too many intermediate indicators say this market has topped and is giving the bulls a very false sense of hope.

For comparison purposes, I think the S&P chart is and will continue to follow the Euro and oil....and that is way down.

All the best,

Dave Narby said...

I see no divergence.$NYAD,$NYHL,$NAAD,$NAHL,$AMAD,$AMHL

There was what looked like massive short covering by JPM last friday

There was NO short covering into the close today, or if there was, it didn't even slow it down.

Institutional selling is increasing.

Insider selling is back to 58:1

Employment is abysmal.

Mutual fund cash levels are lowest in months (per Technical Take).

QE is ending.

Dollar short squeeze is on, aided by Eurozone worries.

Who the hell wants to be long here?

janet said...

Kishore, Kishore lets not get

MA said...


Your overall judgement on market direction and timing is clearly very good. However, I cant help feeling that I am jumping off a cliff as I follow your lead.

I feel I need to get out of my long positions that I have been scaling into since last week, but maybe this is exactly the WRONG time to do so.

I guess we will see.

jeff said...


I think the key to good trading/investing is to also provide your devout followers a key to know if you are wrong. Case in point, you mentioned a few weeks ago your expectations for the S&P to make it down to the 1090-1115 level and then resume a bounce to the upside. Well, we all know what happened to those levels.

But what would be as equally impressive to your expected sell-off prediction(which obviously happened) is to define your risk for those who got long around these level to get out.

Perhaps given this a free site, that will never happen.

Anyway, here is to an up day tomorrow/Wednesday into the 1075 or level to complete an ABC retracement before the next sell-off.

Good luck to all whichever way you go in this market.

Win said...

Hey Narby,

Here's an interesting article on insider selling, and how much it predicts the market.

From the graph, it appears that there are more Insider selling peaks at tops than at bottoms.

Also look at the TLT and TNX charts. Do those look like they are bearish for equities?

Good luck, Dave.

Young Kim said...

I followed Carl's analysis on this since last Thursday, and I lost already tens of thousands of dollars, I made a massive leverage bullish bet, and it was Thursday, Friday, and Monday that did me in. I do not blame Carl's analysis, as I think for myself, but we need to of course take personal responsibility for all the data we crunch. I will continue to read Carl's analysis. I will continue to stay bullish here.

Ali said...

i think you are to bullish buddy. the "smart money" will start to short long befor 1200, maybe at 1150.