A Daily Chart with Data and my Comments will be Posted here by 8:30 AM Eastern Time or Noon on Weekend the following morning, baring technical problems or prior notice. My Data Source is Markets Diary: Closing Snapshot - Markets Data Center - WSJ.com
Chart and Data Below (Click on Image for bigger chart)
Tuesday Morning 8:00 AM February 2 2010 Comment for Monday Feb 1 Close: T Theory Forecast remains bullish for the longer term based on the long term AD T #13 but the S&P continues breaking down below the mid-channel support noted in the chart (Negative).
The W Bottom in the volume oscillator is likely to be OK for a bounce, but not a buying opportunity. Note as the S&P is breaking below the black mid-channel bullish market support line, the Arms Ratio for the last 4 days has now been 0.75, 0.85, 0.99, 0.46 all overbought readings that imply the market is not actually getting oversold. The market is entitled to rally, bringing up the Volume oscillator to the neutral area around the zero line, then a new decline is likely that will end in new lows near the green envelope. That oversold condition should produce a new buy for the run up to May.
Question from Lee: Terry, I've only looked at a small fraction of these W bottoms in your oscillator compared to what you have looked at, but it seems to me that the good ones are divergent. That is, price and the oscillator both make a swing low, then price drops lower for the right side of the W while the oscillator actually creates a higher swing low. Have you noticed this? Lee
Yes and now that I archive these daily posts I will start answering technical questions here. The best bottoms are what I defined in the 1990s as T Theory "Accumulation Lows". An example is the pattern at the center of the second Bull T. Note the Blue Volume Oscillator rallied from a mid June low producing a bounce in the S&P but that 4 or 5 day rally collapsed into a new lower July low. However the volume oscillator held at a higher July low. This an accumulation low as I defined it in T Theory. It is a rare occurrence but produces superior opportunities. We will look for one over the next two weeks because the Arms Ratio is moving to a sell. Terry
See Recent Posts at bottom of page. Check my Sunday TTO Update Terry Laundry's T Theory Observations for this coming Sunday afternoon for bigger picture details and further comments.
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