12 years of weekly SPX charts. As of right now we have a weekly sell signal as Wms%R going below 50. Spring/summer sell signals typically only go to mid BB40 in a generally uptrending market as recently, with occasional whipsaws along the way, so aggressive positioning either direction may be taking excessive risk until a more typical Sept-Oct bottom. I would add that stochastic Ws tend to be good buying opportunities off the bottom of the W but whipsaws can still happen. Usual interpretations apply and good luck trading, Don
XAU redo. Usual interpretations apply. I'd call attention first to the weekly chart where stochastic shows a W and one year price chart is also a fairly symmetrical W suggesting an important bottom. Price still needs to take out mid/upper 90s, then things could get veddy interesting. BPI is above its 20d MA and moving above 30. Best, Don
A friend explained Zweig thrust as 10dEMA of Adv/tot where going below .40 and then going above 0.615 is bullish, although I'd add whipsaws can happen before a rally becomes susptained. Chart is placed with weekly price, 10dNH% which tends to be better at tops and BPI which tends to be better at bottoms. Good luck trading, Don
Sell in May and go away? Just posting updating one year charts to see how the old adage plays out every year, using a weekly price chart for the smoothing effect. So far breath indicators show negative divergence since May and VIX/VXV shows positive divergence, also a negative. Best, Don
Weekly stochastic is a fave indicator of mine, and esp when it forms a W it often seems to lead to a tradable rally. The midpoint of the W is typically near the midline and at least one of the bottoms should be near the bottom line. A higher low on either the stochastic or one of the accompanying indicators would be favorable. A buy signal would be when the second bottom of the W first crosses up if confirmed by Wms%R going above -50, and sell signals as Wms%R going below -50 should be followed. I'm looking at the indicator here just by itself (with Wms confirmation) without regard to other indicators that don't strictly depend on price action such as breadth, volatility and sentiment, but of course I consider these very important. Ok, with my science, math and medical training I'd be the first to look askance at the above presentation as a mere hypothesis rather than something to hang your hat on, so let's run the usual 12 years of charts and see how it plays out. Good luck trading and chart comments below, Don
1. 2006 May-Aug a jagged W with a whipsaw eventually led to a fine rally after a whipsaw. In some years the middle of the W may not go down to or below the midline but Wms%R buy/sells still apply. 2. 2008 March buy was soon followed by a Wms sell. 3. 2008 Oct and Nov upcrosses lacked Wms confirmation, so there I'm looking at a second indicator. 4. 2009 March buy was fabulous, I assume extreme breadth lows gave some energy here. 5. 2010 July had a whipsaw on Wms to fine rally soon after. 6. 2011 Sept had a brief whipsaw and then a fine rally. 7. 2012 May is more of a holster than a W but it led to a decent rally. 8. 2012 December had a very high second bottom and led to a fine rally. 9. 2013 Sept did not have a Wms sell but could be used to add to positions. 10. 2014 no typical W but lots of Wms signals. 11. 2015 Sept had late Wms confirmation and a quick whipsaw sell. 12. 2016 Jan veddy interesting but not yet confirmed by Wms, and of course we're still waiting for the "right side of the chart".
Conclusion: my typical weekly stochastic W pattern, when it happens, is at best a "heads up!" indicator that requires confirmation by other inicators such as price and breadth, others if you like may include sentiment and volatility indicators, see Nasdaq charts for some examples.
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