Here's the cruncher. There have been no new 20-Day New Lows amongst the 50 Leaders since before Christmas.

Until we see the 20-Day New Lows lift off the Zero level, the trend remains upwards.

Cheers

Red

Late night comments, 5/1/2010

(Click on the charts above to see a bigger version.)

The first chart above shows the number of stocks from the 50 Leaders making new 20-Day highs. This is now at an extreme level of 60% (30 stocks). At the previous high of the All Ordinaries (XAO), in mid-October, the percentage of stocks making new 20-Day Highs was 40% (20 stocks).

This is beginning to look like a blow-off top.

Then look at the next chart.

This now has the complete profile of an over-bought market. The percentage of stocks from the 50-Leaders above the respective 10-Day, 50-Day and 150-Day Moving Averages is as follows:

• Above the 10-Day Moving Average - 90%
• Above the 50-Day Moving Average - 90%
• Above the 150-Day Moving Average - 96%

These stocks can, of course, stay up there for extended periods of time. But when they start to fall - this market will probably fall hard - at least in the short term.

What's fascinating about these stats is, while the number of stocks in the 50-Leaders making new 20-Day Highs is at an extreme (new) high, the percentage of stocks above the 10-Day Moving Average has dropped back in the past two days from 98% to 90%. hmmmm. Somethings out of kilter here. This divergence may or may not mean something. But it certainly looks ominous.

Cheers
Red

Market Comments. 18/11/09

Another reversal down day on the XAO. That's three out of the past five days that we've had reversal down days. (See the long 'wicks' on the candles.) And they've occurred right at overhead resistance. The bears are trying to break this lower, but haven't succeeded yet.

MACD still hasn't risen above the zero line.

UpVol/DownVol was positive today at a mildly bullish 1.6.

Small Ordinaries were down -0.2% while the 50 Leaders were up +0.3%. So risk aversion was evident in the market.

I think today was a tie between the bulls and the bears. The current impasse will be broken soon. Just which direction - I haven't a clue. I'll let the market show the way.

Up - above 4817 on the XAO.

Down - below 4706.

Market Comments 12/11/09

Choppy reversal day today which didn't tell us much.

The daily candle was a "shooting star" which is theoretically bearish but not particularly reliable.

Advance/Decline Ratio was 1.13, mildly bullish. But the UpVolume/DownVolume was 0.82 - mildly bearish.

There were six new 20-day highs today from the 50 Leaders. That's the best we've seen for 14 days. But of those, five out of the six were intra-day highs which had reversed below the key level by the end of the day.

So - I think we have to take our cues from support/resistance and overbought levels. The market reversed off a key resistance level and stocks above the 10-Day SMA remains over bought at 80%. On those figures I'd expect more sideways to down action for a couple of days.

Market Comments - 11/11/09

Bit of a nothing day today. Opened up about 20 points, long sideways drift all day, closed up about 20 points.

The market continued into overbought territory with 92% of the 50 Leaders above the 10-Day Moving Average. This is now above the level it was at in the middle of October when the market sold off.

A little risk aversion evident today with the 50 Leaders up +0.5% marginally better than the Small Ordinaries at +0.4%, but nothing much in it.

Will it sell off tomorrow? Dunno - but the odds are higher now than on any of the previous three days.

Market Up-date 09/11/09

Once again the market is getting close to overbought in the short term.

The % of the 50 Leaders above the 10-Day SMA is getting close to the 80% level. The last time it was over 80% was 15th October - the beginning of the most recent pullback. One more day up should be the end of this small counter-trend movement (if today wasn't the last).

Market view -3rd November, 2009

Well - I backed the Melbourne Cup winner today. Woo hoo.

Stock market

The market finished virtually flat today.

New lows increased again today (11 new lows) without any new highs.

Stocks in the 50 Leaders,

* above the 10-Day SMA - 2%
* above the 50-Day SMA - 18%

This is too low - expect a bounce - but I don't think there'll be a lot in it. (I made the same call yesterday. Well, we didn't go up - but we ended flat - that's close enough? Maybe I'll get it right for tomorrow.)

Market view - 2nd November, 2009

I can't imagine a situation where a bounce is more due than the present time.

Here's the stats for the 50Leaders:

Above 10-Day SMA: 2%
Above 50-Day SMA: 18%
Above 150-Day SMA: 78%.

The 10-day reading is grossly oversold.

The 50-Day reading is oversold.

The 150-Day SMA has come off an overbought level where it's been for weeks - which allows for some wiggle room.

Given the "grossly" on the short-term, and the "over-sold" on the medium-term, and normalisation on the long-term, it looks like a lay-down misere for tomorrow.

I bet its up tomorrow. But - not for too many days in the future.

Cheers

Comments - 29/10/09

Yesterday's sell signal played out today. The general market picture is very weak. Medium term weakness is expected - but expect a bounce tomorrow.

Here are the 50-Leader stats:

Yesterday:

Above 10-Day SMA - 10%
Above 50-Day SMA - 38%
Above 50-Day SMA - 92%

Today:

Above 10-Day SMA - 16%
Above 50-Day SMA - 24%
Above 50-Day SMA - 88%

I'm including yesterday's figures because we have a non-confirmation on the 10-Day SMA line. That is, the figures today are stronger than yesterday.

That suggests that internal strength may not be as weak as the index absolute figures show. Expect a bounce tomorrow.


Stocks from the 50 Leaders making new 20-Day Lows - 24

Stocks from the 50 Leaders making new 20-Day Highs - 2.
(Both were defensive stocks: Sonic Health and Telstra)

The 20-Day New Lows is extraordinarily low - almost half the index.

Expect a bounce tomorrow.

50 Leaders - Wrap up, 28/10/09

Here are the 50-Leader stats:

Above 10-Day SMA - 10%
Above 50-Day SMA - 38%
Above 50-Day SMA - 92%

Stocks from the 50 Leaders making new 20-Day Lows - 13

Stocks from the 50 Leaders making new 20-Day Highs - 2.
(Yep - Telstra was one of them - the other was Wesfarmers. Both Defensive Stocks.)

Those numbers are probably low enough for a bounce to occur.

For how long is another question.

The banks were pummelled today and the candle stick charts for today look like big black bombs. That probably means a pull-up tomorrow - but the technical damage looks to have been done. This looks like Wave A of an ABC pullback for the banks.

I didn't quantify it as I went through - but subjectively I noticed a lot of completed double tops. And that also probably means a test of the valley between the tops. So a move up is on the cards. If the test of the valley results in respect - then we can look at another few days or a couple of weeks (or three or four or more) of downward movement. But I'll just go with the flow.

The number of new lows also suggests a bounce. The Turtle Traders would be going short those stocks. But only about 30% of those play out (Linda Bradford Raschke, "Street Smarts").

So the courageous should be piling in - probably at the end of today.

I think I'll go to the park and play slippery-slides with my grand-daughter for a couple of days and then see how it goes.

50 LEADERS

50 Leaders - Bullish Percent Readings

Last week (Fri, 9/10/09):
No. of Stocks above 10-Day SMA: 32 (64%)
No. Of Stocks above 50-Day SMA: 42 (84%).
No. Of Stocks above 150-Day SMA: 43 (86%).

This week (Fri, 16/10/09):
No. of Stocks above 10-Day SMA: 39 (78%)
No. Of Stocks above 50-Day SMA: 44 (88%).
No. Of Stocks above 150-Day SMA: 48 (96%).

On Thursday, 15/10/09:
No. of Stocks above 10-Day SMA: 45 (90%)
No. Of Stocks above 50-Day SMA: 45 (90%).
No. Of Stocks above 150-Day SMA: 48 (96%).

On Thursday, we also saw the extraordinary event where 20 of the 50 Leaders made New 20 Day Highs.

These figures are just too high.

The last time we saw figures like the Thursday ones, the market went down about 2.5%. The probabilities this time are similar – or it could be the start of even more carnage.