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Posts Tagged ‘breadth divergence’

SP500 Breadth Arc Divergences Signals

SP500 Breadth Arc Divergences Signals

Courtesy of Corey at Afraid to Trade

I wanted to show two quick charts of the internal S&P 500, highlighting a “Rounded Arc” formation along with a view of a potentially significant negative Breadth divergence at the highs.  Let’s take a look.

First, the 30-min chart with 3/10 Oscillator “Momentum” Divergences and Arc Pattern:


(Click for full-size image)

You can almost draw a full arc on the 3/10 Oscillator peaks as well, which forecast an arc prior to it happening.

Now, the oscillator is making new momentum lows, and the peaks in the oscillator are forming lower highs as price formed higher highs – that’s the sign of a classic non-confirmation which can be a bearish signal.

The fact that price is forming a clean ‘arc’ pattern also has bearish implications, given that arcs represent a gentle transfer from demand (buyers) to supply (sellers).

The expectation is that the arc formation has already, or will peak soon, and price will follow the arc now to the downside.

Let’s take a deeper look at market internals to see if we’re getting a similar picture.

Here is a 30-min chart of internal “Breadth”:

$SPX chart

The lower pane ‘indicator’ is actually a symbol – $ADD – which stands for “Advance/Decline Difference” (or the difference between NYSE advancing stocks minus NYSE Declining stocks) drawn as a line chart.

We see that breadth made a new high near July 15th with price at 930, though price has peaked at 1,018, breath has formed a series of lower peaks, which also lock in a non-confirmation or divergence just like the momentum oscillator.

The breadth divergence is more ‘important’ or significant than the momentum oscillator, because the momentum oscillator is price-based.

The implication is quite bearish, given that the S&P 500 is hovering beneath critical resistance at the 1,007 level as well as the 38.2% major Fibonacci level at 1,014.

Should price break above 1,020 solidly, it would disconfirm (overrule) these divergences, but until that happens – and it could – we have to assume resistance will hold and that the divergences will play out as they have so many times in the past.  This concept of ‘non-confirmation’ dates back to Dow Theory!

I describe these patterns in further detail to subscribers of the Idealized Trades and also this week’s Intermarket Technical Report, which…
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All About Trends

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Zero Hedge

The Timestamps Begin: "The Impact Of The Blizzard On Employment Will Be Near Zero"

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Just because we enjoy collecting snippets of soundbites and information, especially when the originators of said soundbites do a U-turn a few weeks later, here are the first two "timestamps" regarding the impact of what may be the biggest blizzard (and certainly one of the Top 5) in New York city history.

First, from Stone McCarthy:

I have been getting a few inquiries as to how the impending snowstorm might impact on the January or February employment data.

Based on the timing of the storm I suspect the impact on the January employment data will be near zero. Conceivably, the hours worked data could be marginally influenced for those workers that miss so...



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Phil's Favorites

How Global Interest Rates Deceive Markets

Thoughts from the Frontline: How Global Interest Rates Deceive Markets

By John Mauldin

“You keep on using that word. I do not think it means what you think it means.”

– Inigo Montoya, The Princess Bride

“In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.

“There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible eff...



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OpTrader

Swing trading portfolio - week of January 26th, 2015

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Sabrient

Sector Detector: With the Fed fading into shadows, investors look overseas for new catalysts

Reminder: Sabrient is available to chat with Members, comments are found below each post.

Courtesy of Sabrient Systems and Gradient Analytics

By Scott Martindale

Last week, the S&P 500 put an end to its streak of weekly losses, despite giving back some gains on Friday. Thursday provided the big catalyst, with the ECB’s announcement of its bold new monetary stimulus plan. Investors were cheered and soothed for the moment. And U.S. fundamentals still look strong. But with Greece trying to turn back time, with volatility elevated (and likely to continue as such), and with the technical situation still dicey, the near term outlook is still worrisome.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart...



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Chart School

Real Median Household Income: A Significant December Increase

Courtesy of Doug Short.

Summary: The Sentier Research monthly median household income data series is now available for December. The nominal median household income was up $537 month-over-month and $2,072 year-over-year. That's a 1.0% MoM gain and a 4.0% YoY gain. Adjusted for inflation, the numbers were up $738 MoM and $1725 YoY. The real numbers equate to a 1.4% MoM increase and a 3.3% YoY increase, thanks to -0.37% drop in the Consumer Price Index.

In real dollar terms, the median annual income is 5.1% lower ($2,900) than its interim high in January 2008 but well off its low in August 2011.

Background on Sentier Research

The traditional source of household income data is the Census Bureau, which publishes annual household income data in mid-September for the previous ye...



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Insider Scoop

UPDATE: Albert Fried Initiates Coverage On TubeMogul On Room For Share Growth

Courtesy of Benzinga.

In a report published Monday, Albert Fried & Company analyst Rich Tullo initiated coverage on TubeMogul Inc (NASDAQ: TUBE) with an Overweight rating and $23.00 price target.

In the report, Albert Fried & Company noted, “While TUBE shares are up 120% since the IPO the lock up expired on January 14, 2015, which means insider stock is potentially for sale. Despite the overhang, we think there is room for share growth as TUBE expands domestically, and globally and also as TUBE launches new applications such as Performance TV Ad buying. While the TUBE revenue model is complicated, we think investors will growth comfortable with the model as several industries such as Internet Search and the Oil Industry also have pass throughs. TUBE has less than 1% media buying ma...



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Market Shadows

Are You Trading or Gambling?

ARE YOU TRADING OR GAMBLING?

An interview with John Ehlers of Stock Spotter and Mesa Software

By Ilene

Ilene: John, in our last discussion about trading systems in general and yours in particular (Can trading be reduced to cycles, stresses and vibrations?) you mentioned Monte Carlo simulations and their use in measuring performance. Can you explain more about how you measure the performance of a trading system?

John: Let's start with comparing trading with gambling. The two have several things in common.  In both ...



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Digital Currencies

Jitters After Bitcoin Exchange Suspends Services

So as I was saying yesterday (Bitcoin: The Biggest Clown Show In History?), Bitcoin has several obstacles on the path to potential success as an alternative currency. But I forgot to mention hacking and theft at Bitcoin exchanges and other technical problems. This is related to the lack of government backing and the fact that the value of Bitcoins is based entirely on confidence.  

Jitters After Bitcoin Exchange Suspends Services 

By 



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Pharmboy

2015 - Biotech Fever

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PSW Members - well, what a year for biotechs!   The Biotech Index (IBB) is up a whopping 40%, beating the S&P hands down!  The healthcare sector has had a number of high flying IPOs, and beat the Tech Sector in total nubmer of IPOs in the past 12 months.  What could go wrong?

Phil has given his Secret Santa Inflation Hedges for 2015, and since I have been trying to keep my head above water between work, PSW, and baseball with my boys...it is time that something is put together for PSW on biotechs in 2015.

Cancer and fibrosis remain two of the hottest areas for VC backed biotechs to invest their monies.  A number of companies have gone IPO which have drugs/technologies that fight cancer, includin...



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Stock World Weekly

Stock World Weekly

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Option Review

SPX Call Spread Eyes Fresh Record Highs By Year End

Stocks got off to a rocky start on the first trading day in December, with the S&P 500 Index slipping just below 2050 on Monday. Based on one large bullish SPX options trade executed on Wednesday, however, such price action is not likely to break the trend of strong gains observed in the benchmark index since mid-October. It looks like one options market participant purchased 25,000 of the 31Dec’14 2105/2115 call spreads at a net premium of $2.70 each. The trade cost $6.75mm to put on, and represents the maximum potential loss on the position should the 2105 calls expire worthless at the end of December. The call spread could reap profits of as much as $7.30 per spread, or $18.25mm, in the event that the SPX ends the year above 2115. The index would need to rally 2.0% over the current level...



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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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