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Monday, January 14, 2019 9:13:28 AM
The NASDAQ advance-decline 11-period moving average soared to one of the highest readings in 20 years
By: Greg Schnell | January 13, 2019
In a world of extremes, the market yo-yo range continues to expand. After some sentiment readings reached 2008 levels on the downside, this week saw a serious bounce back. The NASDAQ advance-decline 11-period moving average soared to one of the highest readings in 20 years. The 11-period EMA is a two-week reading; while it is not the highest reading, it is definitely the biggest swing in seventeen years on the chart. When I look through the historical moves shown, a few historic moves suggest a significant rally point where the index continues to climb like 2016 after such a reading. There were also high readings that marked exhaustion moves after sustained advances. Because of the really low reading we had prior, this looks more like an initiation thrust to start a new rally.
The NASDAQ net new 52-week highs (highs minus lows) reading is still very weak, though it doesn't seem too out of the ordinary. The daily swings are up to around zero. Looking back on the chart, we need this to surge up to significantly higher levels. The current level is pretty typical for a bounce.
Using an 8-period MA in the top panel, we are currently at -8; that's okay, but until the moving average starts to get above 50, we could easily drop back down. Based on the grey area in the top panel, you can see that a secondary low has been made whenever the NASDAQ pulls back this hard.
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By: Greg Schnell | January 13, 2019
In a world of extremes, the market yo-yo range continues to expand. After some sentiment readings reached 2008 levels on the downside, this week saw a serious bounce back. The NASDAQ advance-decline 11-period moving average soared to one of the highest readings in 20 years. The 11-period EMA is a two-week reading; while it is not the highest reading, it is definitely the biggest swing in seventeen years on the chart. When I look through the historical moves shown, a few historic moves suggest a significant rally point where the index continues to climb like 2016 after such a reading. There were also high readings that marked exhaustion moves after sustained advances. Because of the really low reading we had prior, this looks more like an initiation thrust to start a new rally.
The NASDAQ net new 52-week highs (highs minus lows) reading is still very weak, though it doesn't seem too out of the ordinary. The daily swings are up to around zero. Looking back on the chart, we need this to surge up to significantly higher levels. The current level is pretty typical for a bounce.
Using an 8-period MA in the top panel, we are currently at -8; that's okay, but until the moving average starts to get above 50, we could easily drop back down. Based on the grey area in the top panel, you can see that a secondary low has been made whenever the NASDAQ pulls back this hard.
Read Full Story »»»
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