I believed that once T13 ended, we would start to see a decline in the S&P as the cash build up phase of T14 started. Had I studied the history, I would have known better.
Once T11 concluded and T12 started in 1998, the S&P continued to rise into 2000 before starting its descent into the center post of T12:
Likewise, after T12 concluded and T13 started in the summer of 2007, the S&P climbed to its final peak in October 2007 before starting its descent into the center post of T13.
Similarly, T13 expired in November of 2010, yet the S&P continues to climb.
The corollary to this lesson, as BillH has repeatedly commented, is that long range Advance Decline Ts are much better suited to going long at the center post than going short at the expiration of the T.
I would observe that shorting the first bearish divergence between the S&P and the NYAD after the end of a long range ADT was profitable in 2007 (9.4% correction) and 1998 (19.3% correction).
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Posts
Do I hear an Amen?
ReplyDeleteAmen, Brother Parker,
Amen!
Bill
Here is a look at the current divergence
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=$NYAD&p=D&yr=1&mn=0&dy=0&id=p37637679845&a=217093274
Bill
Bill
ReplyDeleteYes - as I have noted previously ("Is T14 Starting"), currently there is bearish divergence between the NYAD and SPX.
It remains to be seen if that divergence will last until the SPX starts to break down, or whether the NYAD will break to new highs along with the SPX.
Yes Parker Good work...nick
ReplyDeleteParker
ReplyDeleteI have been monitoring the HSKAX and it closed yesterday on the low established a couple of weeks ago.. Previous low and close last evening was at 15.01.
http://stockcharts.com/h-sc/ui?s=HSKAX&p=D&yr=1&mn=0&dy=0&id=p57730303271&a=213529659
If it breaks the 15.01, it will be another signal that eminent decline is possible.
Although my Momentum Change indicators sill signal an up market, first generated 12/1 at 120.5 we are watching carefully for what we feel we be a very important Momentum Change.
Best to your trading
Bill
Bill
ReplyDeleteI have been watching HSKAX too. We know it can produce a false positive warning perhaps 1/3 of the time. What we don't know is how its predictive power has been affected by QE2.
So, worth watching, but not necessarily the final word.
Any word on Arch Crawford's take on the markets. A while back he pointed to Dec 21-22 as a notable turning point.
ReplyDeleteTim
ReplyDeleteHe probably did so because of the lunar eclipse on the winter solstice.
Looks like NYAD made a new high...I track the stocks only NYAD on Bloomberg - that has not had any divergence at all, fwiw.
ReplyDelete