Headlines: Bullish percent indicators are starting to deteriorate Short-term confidence may be turning Small caps getting smaller? Oversold Dollar Index bounces from support Bullish Percent Index indicators are starting to deteriorate This week we saw the financial media and President Trump glorify the fact that the DJIA had exceeded 22,000 for the first time. It’s as if 22,000 meant something. Problem is it doesn’t, except for the fact that it attracted widespread media hype. It reminds me of a previous President toting victory with a “Mission Accomplished” sign behind his back. That one didn’t turn out too well. Since my longer-term indicators remain, for the most part, fully in the bullish camp, I am not saying we are just about to begin a new bear market. What I am saying though, is that it would not be surprising from a contrary viewpoint, to see some kind of a correction develop in the weeks ahead. That’s always a difficult call in a strong bull market, so my warning is more for leveraged short-term traders than longer-term investors. Chart 1 features the New York Composite ($NYA) together with the NYSE Bullish Percent ($BPNYA) indicator. Most folks interpret this indicator from the point of view of its level. A high level is as good as it gets, and tends to be bearish, whereas a low level typically represents a buying opportunity. I certainly buy that approach, but I also think that trend is equally as important. In other words, when you see a trendline violation on a Bullish Percent Index (BPI), and this is confirmed by the price, it typically results in a worthwhile move for the $NYA. We see several successful signals using this approach and an obvious failure last June. On Friday, this series dropped below its November-August up trendline. That break is not quite decisive yet, but any additional weakness will make it so. Note also that the bullish percent has been tracing out a series of declining peaks, unlike the average which has been moving higher. That tells us that fewer and fewer issues have been participating in the rally. The breaking of the trendline indicates that this trend of fewer stocks in bullish trends is likely to extend. I would expect that trendline break to adversely affect the NYA, but the actual signal requires a drop below its November-August up trendline, say with a daily close under 11,800. Until that happens all bets for a correction in the Index are off. August Market Round up webinar. That red trendline break confirms the false upside breakout and suggests that the BPI will move lower. Throughout this whole period, the S&P itself has managed to remain above its 2016-17 up trendline. If it drops below the trendline, this would confirm this week’s breakdown in the Bullish Percent Index. We look to a break below 2430 to confirm this, as such a break would also mean a violation of the 50-day MA. Chart 5 Moreover, Chart 6 indicates that the upside Relative Strength (RS) breakout was a failure, and that the RS line has now dropped below a key red support trendline. Not a good sign for small caps! Chart 7 This view is also supported by the fact that the Dollar Index has violated a steep down trendline and the short-term KST has gone bullish. Chart 8 Good luck and good charting, Martin J. Pring
This post looks like something a blowhard analyst on CNBC would make, or talk about, But at the end of the day -- they essentially have 0% market returns, (if not negative)
All analysts are blowhards if they do not put their money where their mouths are. I'd LOVE to get a job as an analyst for a media outlet (or any bank that pays money to be an analyst there), because win or lose, you still get paid for spouting silly nonsense. And you probably get paid upper-five figures even as a junior blowhard. Amazing industry!
Sorry It is members only blog, so the link did not work. And copy and pate failed to paste the whole article and further more, I could not delete the post because " Thread Tools" is not working for me. so please accept my apology !
Are you really Martin J Pring? https://www.amazon.com/Martin J. Pring/e/B000APY7TU/ref=la_B000APY7TU_pg_1?rh=n:283155,p_82:B000APY7TU&sort=author-pages-popularity-rank&ie=UTF8&qid=1502012865 If so - my respect
47k gbp at a BB for an analyst 1. hardly upper. but the research they produce can be useful. and not all analysts are equal. you can also track their predictions easily so there is some form of skin in the game.
Summary: Trump's presidency has produced a record high in the averages but it's nothing... Personally I don't believe we are anywhere near the highs. I remember the pundits in 1995 or so, talking about "nosebleed levels". One guy used Elliott Waves to predict a huge, huge, historical crash for1995 [and was still selling his book years later...] That runup started in 1982 really, when 401K's were conjured into existence and eventually it morphed into a bubble that just wouldn't burst. Currently consumers are positive about the economic outlook but they don't have money to spend. Obamacare cost is 60% of consumer spending! If Obamacare could have been repealed recently we'd be heading into a bubble already. I'm guessing that they will get rid of it eventually: then fasten your seatbelts.