I actively trade both....and use shorter term NLs Keep an eye on rb structure.... Everybody wants to short this pop in crude....I'm not sure that'll work....structure of rbob breaking down considerably though.... Products will be the gauge of the market going forward...just my opinion
For whatever this is worth, I am really struggling to find new decent longs in stocks. And my internal ACD breadth which covers 2500 stocks is at really wide extremes. Just sayin...
The 30 day NL is around zero so choppy number line. Failed monthly A up and now approaching monthly A down. Still above QTR A up. But we get new levels in a week or so. Nothing to do here.
So it's also bad if the NL stays too positive or negative for too long? Do you fade NLs as one of your strategies or have you tested that?
Mav may have a different opinion, but in my experience with extreme NLs, context is important. In Fisher's book he says "when a numberline reading goes from 0 to +/-9, and trades at +/-9 for two cosecutive trading sessions, there is a good chance that a big move in the underlying instrument could be underway". In regards to context, I wouldn't want to open an initial short position on a stock if it had continuous readings of <-20 AND the broad stock market was also deeply negative (think oil stocks in mid January). However, I would be really interested in a stock if it had continuous numberline values >20 DESPITE the broad market being deeply negative (think gold mining stocks, or NDLS in mid January). Stocks whose numberlines diverge deeply from what the board indices are doing are great because because when the broader indices turn they really take off. If you can find a stock today that has a deeply negative numberline despite that market's strength over the last month, then chances are that stock is very sick and will fall further when the indices turn down. This is just my opinion, but a big part of successfully being able to deal with the ebbs and flows of a position one is in, is the get into the position as close to the beginning of the move as possible. If I take a short position on an oil driller after its fallen 70% this month when the broad market is down 15%, the potential for a big retracement is much greater than if I'm short when the numberline went quickly from 0 to -9 and the stock has only fallen 10%. Just my two cents.