Tracking The Breadth Of Marketplace Pull As Well As Weakness

I idea I would percentage a continuing move inwards progress.  This is composite index of all NYSE stocks giving purchase vs. sell signals for 2 dissimilar technical systems:  Wilder’s Parabolic SAR together with Bollinger Bands (raw information from Stock Charts).  The nautical chart higher upwardly tracks a 10-day moving average of the index.  The index provides a full general feel of “overbought” together with “oversold”.  Interestingly, the overbought readings create non atomic number 82 to reversal on average.  Rather, if nosotros facial expression at the strongest one-half of signals since June, 2014 (when I began assembling these data), the adjacent iii days inwards SPY accept averaged a gain of +.24%.  When nosotros facial expression at the weakest one-half of signals, the adjacent iii days inwards SPY accept averaged a gain of exclusively +.01%.  When many stocks are producing purchase signals, in that place tends to move short-term upside momentum.  When many stocks are producing sell signals, on the other hand, nosotros desire to move on the spotter for potential reversal.

Note that we’ve been seeing overbought together with oversold levels inwards the index at successively higher toll levels.  That is what nosotros would facial expression inwards an uptrend.  Where I’ve flora the index to move peculiarly useful is inwards identifying momentum peaks that tend to precede toll peaks during intermediate-term cycles.  The index has likewise been useful inwards identifying when nosotros are getting buying involvement coming out of oversold levels.  That is what we’ve been seeing almost recently.  I similar these kinds of measures, because they nation yous how much distinctive line together with weakness we’re seeing across the wide arrive at of stocks.

Further Reading:  Identifying Trend Days

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