Tuesday, November 18, 2008

This Breadth Indicator Says We May Bounce Soon

One indicator I watch is the 10-period EMA of Up Issues / (Up Issues + Down Issues). When it gets extremely low it normally signals the market is oversold and likely to bounce. On Monday it crossed below 0.36. Below is a study showing how the market has performed other times the indicator has dropped this low.

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3 comments:

  1. AnonymousNovember 18, 2008 at 4:47 PM

    I was wondering if you could post a resource on the web where we could track up volume/down volume as well as up issues/down issues, including charting. Thanks.

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  2. AnonymousNovember 18, 2008 at 7:52 PM

    I had a question on your trading methodology: you post studies like this one quite often - only 30 trade s over 26 years, but it would make sense to take them. Do you have a large portfolio of patterns like this that you trade automatically, or do have a more regular "system"?

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  3. Rob HannaNovember 26, 2008 at 12:31 PM

    1) The charts I look at are now available of the chart page for both Gold and Silver members. They show up/down vol and up/down issues for both the Nasdaq and NYSE.

    2) I generally use the studies to help me establish my market bias. If several are lining up one way and the market is overdone in the opposite direction then I'll often look for a short-term reversion trade based on the studies. For more information check out the Quantifiable Edges Aggregator post at the begining of July.

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