Wednesday, March 29, 2017

Zweig Breadth Thrust

Zweig Breadth Thrust


The Breadth Thrust indicator is a market momentum indicator. It was developed by Dr. Martin Zweig. The Breadth Thrust is calculated by dividing a 10-day exponential moving average of the number of advancing issues, by the number of advancing plus declining issues.

Interpretation

A "Breadth Thrust" occurs when, during a 10-day period, the Breadth Thrust indicator rises from below 40% to above 61.5%. A "Thrust" indicates that the stock market has rapidly changed from an oversold condition to one of strength, but has not yet become overbought.

According to Dr. Zweig, there have only been fourteen Breadth Thrusts since 1945 (as of the date of the original printing of this article ???). The average gain following these fourteen Thrusts was 24.6% in an average time-frame of eleven months. Dr. Zweig also points out that most bull markets begin with a Breadth Thrust.

The last ZBT that we noted, occurred starting Nov 8,2016.
If we apply the the average gain of 24.6% to the average length of 11 months we get:
DJIA         Nov. 20016     18,000 --->22,500 forecast 11 months later in Oct.2017
S&P500    Nov. 20016       2,100 --->  2.625 forecast 11 months later in Oct.2017 

Will the stock market possibly continue straight up until Oct, 2017?  We doubt it.  In fact, the LT Picasso Cycle dates suggest an April high +/-, an August low +/- and then a Nov high +/-.  This last high in Nov is very close to the ZBT average forecast high in Oct. 2017.


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Past performance is not indicative of future results


chart: McClellan SI

Courtesy of StockCharts.com
Take a good look at this chart and you will see a potential repeating pattern.
Let's see if this pattern repeats again this time. 

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This has been posted for Educational Purposes Only.   Do your own work and consult with Professionals before making any investment decisions.   
Past performance is not indicative of future results

Tuesday, March 28, 2017

April 3rd, 1st TD of next month

We are getting close to April 3rd the first trading day of the new month.  

In the following heat map you will see that the first half of April does not have any orange or red days, only yellow and green.  The first TD of April according to the work of Jeffrey Hirsch, see below, produced the 2nd best first TD of the month after May.
This also fits with the potential Picasso Cycle high forecast of April 13th.  See the posting on March 27,2017.
 
Courtesy of @RyanDetrick

The following post was last made on February 1st, so now is a good time for a refresher on this subject.

* Take a look at the 3rd chart below by JEFFREY A. HIRSCH, editor-in-chief of the Stock Trader's Almanac.  
The data shows that the month of May has had the largest total DJIA points gained on the first day of the month from September 1997 to December 2012.   

*** April came in 2nd place !!! 






 





Browsing the Fidelity Customer Service Learning Center can be very useful

Monthly trading patterns: Human behavior shapes market activity
By Jeffrey A. Hirsch

 www.stocktradersalmanac.com

Click on the following link for the full article
http://bit.ly/1HbpM7W

The following is an excerpt from the article

Monthly cash inflows into S&P stocks  

For many years, the last trading day of the month plus the first four of the following month were the best market days of the month. This pattern is shown in Figure 1, where from 1953-1981 the S&P 500 shows these five consecutive trading days posting gains a much larger percentage of the time than the other 16 trading days of the average month. The rationale was that individuals and institutions tended to operate similarly, causing a massive flow of cash into stocks near beginnings of months.

Courtesy of Jeffrey A. Hirsch

“Front-running” traders took advantage of this phenomenon, drastically altering the previous pattern. Figure 2, which follows the S&P 500 from 1982 onward, shows the trading shift caused by these “anticipators” to the last three trading days of the month plus the first two. Another astonishing development shows the ninth, tenth, and eleventh trading days rising strongly as well. One possible explanation is that this mid-month bulge is caused by the enormous growth of 401(k) retirement plans (participants’ salaries are usually paid twice monthly).

 
Courtesy of Jeffrey A. Hirsch

------- > > > DJIA gains more on first day than all other days

Over the last 15 1/4 years the Dow Jones Industrial Average has gained more points on the first trading days of all months than all other days combined. While the Dow has gained 5481.72 points between September 2, 1997 (7622.42) and December 31, 2012 (13104.14), 5323.19 points were gained on the first trading days of these 184 months. The remaining 3674 trading days combined gained just 158.53 points during the period. This averages out to gains of 28.93 points on first days, in contrast to only 0.04 points on all others. See Table 1.
Note that September 1997 through October 2000 racked up a total gain of 2632.39 Dow points on the first trading days of these 38 months (winners except for seven occasions). But between November 2000 and September 2002, when the 2000-2002 bear markets did the bulk of their damage, frightened investors switched from pouring money into the market on that day to pulling it out in fourteen months out of twenty-three. This netted a 404.80 Dow point loss. The 2007-2009 bear market lopped off 964.14 Dow points on first days in 17 months from November 2007 to March 2009. First days had their worst year in 2011, declining seven times for a total loss of 644.45 Dow points.
First days of June have performed worst. Triple digit declines in four of the last five years have resulted in the worst net loss. August is the second net loser. In rising market trends, first days perform much better as institutions are likely anticipating strong performance at each month’s outset. S&P 500 first days track the Dow’s pattern closely but NASDAQ first days are not as strong with weakness in April, August, and October.

Courtesy of Jeffrey A. Hirsch
 For more information contact
 JEFFREY A. HIRSCH, editor-in-chief of the Stock Trader's Almanac and Almanac Investor newsletter, and the author of The Little Book of Stock Market Cycles (Wiley, 2012).

 www.stocktradersalmanac.com


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Just submit your email address in the box on the Blog homepage
This has been posted for Educational Purposes Only.   Do your own work and consult with Professionals before making any investment decisions.  
Past performance is not indicative of future results

Monday, March 27, 2017

Picasso Cycle Update

In this update only the date/s will be mentioned with an "H" for high and a "L" for low.
The chart amplitude can and will be misleading at times.
In addition, it is the date/s that is most important rather than if that date is a projected high or low.
One important reason is because in some cases a date may invert and the "H" or "L" may not mean anything.
A low may actually turn out to be a high and visa versa.
Also it is very important that other tools always be used to confirm any potential ST Cycle Date. 

Picasso Dates, always +/- 
Mar 3-14 H - high occurred on Mar 15th
Mar 20-28 L - possible low occurring in this time frame
Apr 13 H

Comments
See comments in blue above.

Long term indicators appear positive, so far.  Negative divergence on many indicators have been broken very late last year and so they now suggest further upside.  So, if pullbacks develop into the Picasso cycle date Lows and daily indicators are OverSold, it may present a good buying opportunity.
In addition, LT cycles suggest a high around April +/-, low August +/- & high November +/-.  Always remember to confirm cycle dates with your or your professional investment advisors analysis.

Keep following JustSignals using Twitter, @StockTwits or Follow By Email. Just submit your email address in the box on the Blog homepage. This has been posted for Educational Purposes Only.   Do your own work and consult with Professionals before making any investment decisions.  Past performance is not indicative of future results

Tuesday, March 14, 2017

Weakness could be developing


Thursday, March 9, 2017

RYNVX big change in market cap again

Updates in BLUE - RYNVX market capitalization increased $172Mil today, 3/9/17

RYNVX - Rydex Nova Fund Investor Class (Long Fund)

RYNVX    3-11-09  $22Mil     5-14-15  $177Mil           9-4-15       $53Mil 
                                                                                    9-14-15      $52Mil
                                                                                  10-26-15    $140Mil
                                                                                  11/27/15     $182Mil
                                                                                  12/10/15     $187Mil
                                                                                  12/29/15     $189Mil
                                                                                   1/15/16        $51Mil
                                                                                   1/19/16        $37Mil
                                                                                   2/18/16        $37Mil
                                                                                   3/11/16        $52Mil
                                                                         3/14/16      $159Mil
                                                                                    3/1/17       $316Mil
                                                                                    3/3/17       $148Mil 
                                                                                    3/9/17       $319Mil
 
Note  The RYNVX increased $172Mil today, 3/9/17.  That is a whopping increase of $172Mil in market capitalization.  This could be interpreted as some were fearful of not being long in this Nova Fund. Is that fear bearish for the market?  It is possible that this "could" have come from some stock market newsletter writer advising their clients to buy.

When this Long Fund has big changes in market cap in a very short time frame, as it just did on 3/1/17, 3/3/17 & 3/9/17, not very sure if this will have any influence in the market.  We will keep an eye on this and let you know what happens.

Large & small dollar amounts of market cap in the RYNVX long fund displays Greed & Fear in the market...

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This has been posted for Educational Purposes Only.   Do your own work and consult with Professionals before making any investment decisions.  
Past performance is not indicative of future results

Wednesday, March 8, 2017

NYSE McClellan SI

Courtesy of StockCharts.com
In the above chart, there are red vertical lines in recent similar periods in the last 24 months.  Subsequent to these periods the market had bounced up before continuing the trend down.

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Just submit your email address in the box on the Blog homepage
This has been posted for Educational Purposes Only.   Do your own work and consult with Professionals before making any investment decisions.  
Past performance is not indicative of future results