This time short-term breadth.
The market indexes today were mixed – the Dow up again, moving through its bubble, SPY up a little, IWM up a whisper, Nasdaq down a touch. Like a lot of days lately (actually nine out of last 15), it made its move on the open then chopped all day until in the end it has essentially flat-lined for the rest of the day. No big deal and kind of boring.
All four of my end-of-the-day signals came into the day on sells. So swing traders would be either short or in a bull market in cash, watching for the next upswing. This is obviously a bull market. Those swing signals, including the important long-term breadth, remained on sells today except for one.
Short-term breadth gave a buy signal on the close today.
How many times has the market made a move to oversold on short-term breadth and turned up by itself to signal a bounce? As a matter of fact, every time this year a bounce became a swing became a rally.
And once again a bounce is guaranteed tomorrow on earnings news as AMZN, GOOGLE, MSFT, INTC and FSLR (from my bellwether stock list) are surging in the overnight trading (see chart panel below). As can be seen in the QQQ chart (the chart in the upper left), and assuming no disaster strikes later tonight, the Nasdaq is going to gap up madly tomorrow, and probably take the rest of the market with it.
If it doesn’t turn up long-term breadth in a timely fashion, this bounce will be suspect (unlikely but it could sell off right from the open tomorrow). But for now a bounce is a bounce is a bounce…
SWING TRADING SIGNALS:
PRICE: SEll. (Day 2).
SHORT-TERM BREADTH: Buy. (Day 1).
VOLATILITY: Sell, (Day 4).
SPY CLOSE – 255.62
QQQ CLOSE – 146.96
LONG-TERM BREADTH: Sell (Day 8).
CNN MONEY’S FEAR AND GREED INDEX: (71 falling, greed level).
NIFTY-50 STOCK LIST: 18 Buys; 8 Overbought, 18 Oversold, 10 new buys today, 5 new sells.
(click on the chart panel for a larger view)