When Studies Collide

Monday’s breadth study suggested a bounce was likely. On Tuesday the bounce arrived. The S&P rose about 1%. But breadth was still miserable. The NYSE Up Issue % came in at 36%. Weak breadth on an up day is something I’ve gone over before. Three such studies from the blog came on June 10th, September 11th, and October 24th. While the bullish study from last night remains valid, these three are all in conflict with it.

Frequently I’ll see studies based on different indicators conflict with each other. It’s normal. One tool I use to help me sort through the studies is the Quantifiable Edges Aggregator. It helps to provide a quantified snapshot of all I’m seeing and aids me in setting my market bias.

Having studies based on one indicator conflict with each other is not normal. In this case it’s NYSE Up Issues %. It muddies my interpretation of the given indicator and dilutes its value. It’s very rare but in such cases I simply zero out the studies. When the edge is not clear, I step aside and wait until there is a clear edge.

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Just a quick reminder to those in the Boston area that I'll be giving a presentation on short-term market edges tonight.