Travel to Financial Success

The percentage of stocks trading above a specific moving average (or the degree of participation) is a breadth indicator that measures internal strength or weakness in the underlying index. The 50-day moving average is used for the short-medium term timeframe , while the 150-day and 200-day moving averages are used for the medium-long term timeframe . Signals can be derived from overbought/oversold levels, crosses above/below 50% and bullish/bearish divergences. $SPXA50R $SPXA50R   (S&P 500 %Above 50-day SMA) is a breadth indicator that measures the degree of participation and is used for the short-medium term timeframe . Participation would be deemed relatively weak if the S&P 500 moved above its 50-day moving average and only 40% of stocks were above their 50-day moving average . Conversely, participation would be deemed strong if the S&P 500 moved above its 50-day moving average and 60% or more of its components were also above their 50...

Updated Figure 1 on 02/25/2022 (Courtesy of stockcharts.com ) Updated Figure 2 on 02/25/2022 (Courtesy of stockcharts.com ) (Original article posted on 03/18/2018) Very basic forms of technical analysis—like trendlines, support and resistance, and flag/pennant formations—are pretty useful. Not because they work, but because people believe they work, so they work. Also, much of algorithmic trading is based on trading these sorts of technical formations. [4] In this article, we will cover the topics of using new 52-week highs and lows on the NYSE to monitor the internal strength or weakness of broad stock market. Figure 1.  $NYHL on 03/16/2018 $NYHL [1] Net New 52-Week Highs ( $NYHL; see Figure 1) is a simple breadth indicator found by subtracting new lows from new highs. “New lows” is the number of stocks recording new 52-week lows. “New highs” is the number of stocks making new 52-week highs. This indicator provides an immediate score for internal strength or wea...

(Updated 11/22/2021) When Jeremy Grantham was asked the below question: So you've called the Japanese bubble, the tech bubble, and the GFC. Is there a template to help uncover bubbles? And maybe, how were those bubbles different and how were they the same? His answer was: I think they're perfectly straightforward. They're intellectually easy and psychologically disastrously difficult. They're easy because in most cases they're so extreme . It's like how you notice the Himalayas when you're standing in Northern India. I mean, they come out of the plane and they soar up, you can't miss these things. 1928, '29 was just such a massive rally. So the sheer price rise you can't miss. Secondly, just to make it easier, the great bubbles have always tended to rise faster and faster towards the end , and that's a kind of defining feature also. And then thirdly, they have all been accompanied by massive, public, obvious crazy behavior where the headline...

(Updated 03/13/2018) Job creation remained solid in the small business sector as owners reported a seasonally adjusted average employment change per firm of 0.22 workers, a strong showing and a repeat of last month. A headline on Bloomberg —"Goldman Says Stocks May Plunge 25% If 10-Year Yield Hits 4.5%" —said that: [1] If the 10-year U.S. Treasury yield hits 4.5 percent by year-end, the economy would probably muddle through -- stocks, not so much, according to Goldman Sachs Group Inc. Goldman’s base-case scenario calls for a 10-year yield of 3.25 percent by the end of 2018, though a “stress test” out to 4.5 percent indicates such a move would cause stocks to tumble, economist Daan Struyven wrote in a note Saturday. He also said the economy would probably suffer a sharp slowdown but not a recession.  “A rise in rates to 4.5 percent by year-end would cause a 20 percent to 25 percent decline in equity prices,” the note said. Remember that US Treasury traders ar...

Updated on 06/08/2024 This Signal Flashed "Recession" For 22 Months Straight (YouTube link ) By October, TLT plunged 50% from its July 2020 peak, then rebounded 20% by year-end 2023. This year, inflation worries pushed TLT down 10%. Original Post Bull Market A bull market normally goes up in 5 waves and has 3 phases: Smart money moves in Smart money guys — who are not market timers, they’re value finders  Institutional money moves in Public moves in Wall Street will provide the story to catch everybody's attention and public money moves to the market Market Topping Market topping is a process which normally includes  different asset classes peaking in a specific sequence .  Using tech bubble as an example: Bond market peaked  in 1999 Stock market peaked  in early 2000 Stock market historically peaks an average of seven months before every recession Commodity market peaked  in fall 2000 A  bear market is normally triggered by the following series of ...

(Updated 06/30/2018; Click Read More to view the original article) The greenback had a strong quarter ending on 06/30/2018, appreciating against all the major currencies. The Canadian dollar's 2.25% decline made it the strongest of the other majors and is consistent with the loonie's tendency to outperform in a strong US dollar environment .

Two main indexes are used as metrics in the analysis: S&P 500 NYSE Which is broader than S&P 500 For discussion, terms used here have the following meanings: Primary trend Long-term trend  Secondary trend Short-to-intermediate term trends In this article, I will summarize ways of monitoring the primary or secondary trends of  stock market. Primary Trends When SPY hits all time high on 01/26/2018, it is around 11.5% above its 200-day moving average ( MA ), which is historically frothy. To monitor the primary trends, here are some gauges you can use: Slope of the 200-day moving average ( $SPXEW ) $SPXA200R For a primary uptrend to manifest itself, most of the index constituents need to trade above their 200-day averages Death Cross Considered a bearish signal within the market, a death cross occurs when the short-term, 50-day moving average, also called a price trend, crosses below the long-term, 200-day moving average. Some analyst...