Tuesday, September 21, 2010

Strong Breadth on the Breakout

It is very rare to see a fresh breakout occur on such positive breadth as we saw Monday. In the past it has often led to a successful breakout. Below is a study that examines this.





A positive impact can be seen right away. And when looking out 4-5 weeks the risk/reward remains very favorable. The market is certainly very overbought and could pull back at any time. But this is one study suggesting there's a good chance the current momentum begets more buying.

2 comments:

Steveo said...

Boatload O Charts for your bearish delight....
During the ramp, every time I posted a Boatload O Bear, the market would rally.

This shall be the litmus test. Please comment.

http://oahutrading.blogspot.com/

Daniel said...

Thanks Rob as always for these fresh and interesting slants on this confusing and choppy market action.

Thanks Steve for such a dumb comment. It indeed is a litmus test; any comment dumber than this would have to show up ultrapink, that is extra-dumb. Any comment as dumb would be neutral; any comment smarter would actually be worth reading.