Tuesday, October 28, 2008

CBI Moves Back Up To 13

The CBI spiked back up on Monday. After hitting 48 earlier this month it quickly dropped down to 7. It never made it back to the neutral “3” level, but the sharp move from 48 to 7 prompted sales in all CBI related trades on the morning of Tuesday the 14th in the Quantifiable Edges Subscriber Letter. The CBI is now growing again and posted a 13 reading at the close yesterday.

Like nearly all breadth indicators, the CBI has not been quite as reliable this year. Still, the move to 13 has prompted me to take some long exposure. For those not familiar with my CBI you may read an intro here. Plenty of additional information is available by using the CBI label here. Below is graph of S&P 500 along with the CBI for 2008:

(click chart to enlarge)

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