View RSS Feed

Coolhand's Market Analysis

Modest Dip

Rate this Entry
The underlying market strength continues as sellers were unable to do much damage today. This in spite of one of the lowest volume days of the past decade. Volume on the NYSE was under 700 million shares traded. With such low volume and little price movement it's easy to conclude that the downside is still limited. At least for the moment.

There was very little news today, so I'll go right to the charts this evening.

Transfer 5/26/ for 5/27/04-namo-nymo-jpg

NAMO and NYMO flipped to sell conditions today.

Transfer 5/26/ for 5/27/04-nahl-nyhl-jpg

NAHL and NYHL also flipped to sells. I thought they fell a bit much considering we didn't close far off the neutral line.

Transfer 5/26/ for 5/27/04-trin-trinq-jpg

TRIN and TRINQ remained on buys.

Transfer 5/26/ for 5/27/04-bpcompq-png

The beat goes on for BPCOMPQ. It ebbed a bit higher today and remains in a buy condition.

So the signals are mixed, and that keeps the Seven Sentinels in an intermediate term buy condition.

If current market character is any indication, we may chop around for a bit before the next push higher. That's about as bearish as I can get right now and that's not bearish. Having said that though, let's review what it would take for the Seven Sentinels to flip to a sell condition at this point.

All of the signals are very near their respective trigger points, so if we were to get any moderate selling pressure (and the market closes with moderate losses) I would expect all signals to flip to sells. It may take more than one day of selling, but I would think two days of downside would suffice if the first didn't get it. That's the first criterion. The second is that NYMO needs to hit a 28 day trading low. A couple of weeks ago that signal was well away from a 28 day trading low, but not anymore. Let's look at the chart:

Transfer 5/26/ for 5/27/04-nymo-28-day-png

The red arrow shows where the end of the 28 day trading window was today. In other words, that point shows where this market was 28 trading days ago from today. The green arrow shows where we will be tomorrow. It's lower than at any other point on this chart. And it will only be valid tomorrow as it will signify the end of the 28 day trading range for tomorrow's action. After tomorrow the next low is indicated by the lavender line. You can see that where we ended today and where that low is along that line is only about 12 points. We can get there with one good sell off. Or we can get there with some modest selling pressure over the course of 2 or more days.

So while the charts are still bullish overall, it would not take a significant amount of selling pressure to roll this system over.

I point this out not to inject any bearish sentiment, but to make everyone aware how close the system is to a sell signal should any downside action continue. Food for thought for now. Remember, the market always has the last word.

Submit "Modest Dip" to Digg Submit "Modest Dip" to del.icio.us Submit "Modest Dip" to StumbleUpon Submit "Modest Dip" to Google

Updated 02-07-2012 at 05:01 AM by coolhand

Categories
Uncategorized

Comments

  1. crommie's Avatar
    Very well explained Coolhand. Thank you for your daily dose of sanity!
  2. Bronco07's Avatar
    CH --- excellent synopsis ..... thank you
  3. RealMoneyIssues's Avatar
    Quote Originally Posted by crommie
    Very well explained Coolhand. Thank you for your daily dose of sanity!
    Ditto
  4. imike23's Avatar
    Very interesting info CH.
  5. nsurf9's Avatar
    I've always known to invest in any one stock, you must first know where the whole market is moving, for the canvas is the whole market and the brush stroke an individual investment.
    The nature and direction of both elements must understood before any great artist creates any mark. Masterful!

    Thanks for the lesson. Nsurf9
  6. konakathy's Avatar
    Quote Originally Posted by crommie
    Very well explained Coolhand. Thank you for your daily dose of sanity!
    Mahalo - my sentiments also.

    the light bulb is getting brighter.

S&P500 (C Fund) (delayed)

(Stockcharts.com Real-time)
DWCPF (S Fund) (delayed)

(Stockcharts.com Real-time)
EFA (I Fund) (delayed)

(Stockcharts.com Real-time)
BND (F Fund) (delayed)

(Stockcharts.com Real-time)

Yahoo Finance Realtime TSP Fund Tracking Index Quotes