Wednesday, September 23, 2009
Extended
The uptrend has been relentless. There have been several Climax High signals in the markets over the past few months, but these have produced only short, mild corrections. This is typical of a bull market, where we will see numerous temporary bouts of selling on the way up.
The most recent Climax High signals occurred last Thursday the 17th. A number of stocks pulled back, and then we saw a wave of Pristine buy signals on Monday. About half of the market-index ETFs (Exchange-Traded Funds) also pulled back, but a number of others straggled upward to take out the highs set on the 17th. But meanwhile, we noticed that the day after the Climax High, the Nasdaq and DJIA showed heavy volume with just marginal price progress. This is a sign of distribution, described by William O'Neal in his seminal book How to Make Money in Stocks.
At this point the markets are getting a fair ways extended from the 50-day XMA (eXponential Moving Average). We "predict" that the trend will soften from here, with more Climax High signals. Stocks will chop around and basically go sideways for a while, allowing the 50-day XMA to catch up. Notice how reliably this indicator serves as support in an uptrend.
Here's a chart of the nasdaq composite index. The Cimax High signals are shown in red, and Climax Lows are shown in blue. The top indicator window shows the daily number of stocks making Climax Highs, and the second indicator window shows the daily number of stocks making Climax Lows. Note the surge in Climax Lows at the exact bottom, on July 13th.
The 50-day XMA is shown in blue, and the 200-day XMA is in red. The volume bars are plotted under the price window, with the 17-day XMA of volume shown in green. We note with dismay that the volume feed on the market indexes has been spotty at times. This is characteristic of every datafeed I've ever used over the years, and I've never got a good explanation of why. The signals are still valid however.
You can also just pull up the chart in the real GigaScanner. Just enter the symbol Nasdaq and press the GET SYMB button. Then you can see the data readout and use the cursor. You can also set the colors, indicators, and signals to whatever you want to see.
The most recent Climax High signals occurred last Thursday the 17th. A number of stocks pulled back, and then we saw a wave of Pristine buy signals on Monday. About half of the market-index ETFs (Exchange-Traded Funds) also pulled back, but a number of others straggled upward to take out the highs set on the 17th. But meanwhile, we noticed that the day after the Climax High, the Nasdaq and DJIA showed heavy volume with just marginal price progress. This is a sign of distribution, described by William O'Neal in his seminal book How to Make Money in Stocks.
At this point the markets are getting a fair ways extended from the 50-day XMA (eXponential Moving Average). We "predict" that the trend will soften from here, with more Climax High signals. Stocks will chop around and basically go sideways for a while, allowing the 50-day XMA to catch up. Notice how reliably this indicator serves as support in an uptrend.
Here's a chart of the nasdaq composite index. The Cimax High signals are shown in red, and Climax Lows are shown in blue. The top indicator window shows the daily number of stocks making Climax Highs, and the second indicator window shows the daily number of stocks making Climax Lows. Note the surge in Climax Lows at the exact bottom, on July 13th.
The 50-day XMA is shown in blue, and the 200-day XMA is in red. The volume bars are plotted under the price window, with the 17-day XMA of volume shown in green. We note with dismay that the volume feed on the market indexes has been spotty at times. This is characteristic of every datafeed I've ever used over the years, and I've never got a good explanation of why. The signals are still valid however.
You can also just pull up the chart in the real GigaScanner. Just enter the symbol Nasdaq and press the GET SYMB button. Then you can see the data readout and use the cursor. You can also set the colors, indicators, and signals to whatever you want to see.
// posted by gigascanner @ 5:07 AM 
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