Market Bottom a la Mamis

Here's the latest. 3-month view.

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Credit where credit is due: I've been generating these charts on http://www.schaeffersresearch.com/streetools/filters/comp_nh_nl.aspx.
 

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If you look there was a divergence before the latest low. There was a clear one in September too. Price is king-- I want to see that divergence and then a higher low before I adjust my strategies. Getting the ratio out of the basement (say to 0.5 or so) would be nice too.
 
Quote from Corey:

Let's look at correlations to see if my system has any merit...

XLB, 23.58, 0.75
XLE, 46.12, 0.20
XLF, 13.67, 0.91
XLI, 23.25, 0.84
XLK, 15.73, 0.85
XLP, 23.84, 0.55
XLU, 28.93, 0.51
XLV, 25.39, 0.70
XLY, 21.88, 0.92

6/9 sectors are looking a little heavy on the top-side...
More...

Thanks for posting this. I think when the market turns back up, or at least stops falling, we will see a number of different data source have changed in behavior including the Corey's.
 
The amount of stocks now trading above their 5 and 10-day moving averages is increasing pretty dramatically given the rally since last Friday afternoon.

This is yet another great indicator, in my mind. Something to also track as well.
 
all good stuff, just started getting involved with elite. my problem is being patient and believing with conviction when i put trades on...especially in this enviroment, thx for the info
 
(b) hitting what would become the double bottom. Here you can clearly see that fewer stocks are hitting new lows, even though the index is slightly lower on the 2nd bottom

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After examining what happened in 02, you can look at the current 3-month chart and decide which of those phases the current market most closely resembles, if any:

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Here's my analysis

(1) Completely different situation than 2002. Far more stocks got hammered this time.

(2) Price is king-- trend is still quite clearly down.

(3) Ratio of stocks making new lows to highs was not as overpowering in Dec as it was in October; however, lows still beat highs by over 10:1 ratio.

(4) 2002 double bottom: this 10:1 ratio was briefly touched as the index hit each bottom. Current market has been below it since October.

(5) Especially by virtue of (4), I don't expect any sort of reversal like we had in 2002. I think we will find the market will need some time to form a solid base, before there is any kind of reversal. I expect this base to be something like 6 months to a year of sideways, at a minimum.

(6) In the meantime, I continue to favor the short side in all my trading strategies.
 
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