Accumulation Distribution

[brrim]

Attached are gifs of A-D for the RUT, NDX and All Securities.
A=blue
B=green
C=yellow
D=orange
E=red

Friday's numbers
RUT NDX All Securities
A 15.02% 6% 7.56%
B 42.15% 47% 37.24%
C 25.88% 26% 33.73%
D 14.21% 17% 18.58%
E 2.73% 4% 2.88%

D is falling on all charts since 6/8-6/13.
B is the strongest group on all charts.
E is at negligible levels.
A is strongest in the RUT.

Overall the A-D structure looks bullish. Small caps look as if they are ahead of the large caps.

Best regards,
Robert

[Billy]

Attached are gifs of A-D for the RUT, NDX and All Securities.
A=blue
B=green
C=yellow
D=orange
E=red

Friday's numbers
RUT NDX All Securities
A 15.02% 6% 7.56%
B 42.15% 47% 37.24%
C 25.88% 26% 33.73%
D 14.21% 17% 18.58%
E 2.73% 4% 2.88%

D is falling on all charts since 6/8-6/13.
B is the strongest group on all charts.
E is at negligible levels.
A is strongest in the RUT.

Overall the A-D structure looks bullish. Small caps look as if they are ahead of the large caps.

Best regards,
Robert

Thank you Robert,
This is an excellent work that illustrates well and in better detail my own observations on IBD’s Accumulation/Distribution ratings correlations with IWM. Your comparisons are confirming and explaining the nascent relative strength of IWM since 6/15 when the IWM correlation score crossed above its 20 dma. It made a new high from the recent low on Friday and is approaching positive territory where, with variable porosity, past occurences suggest an acceleration in uptrend for IWM once it holds about 2 weeks above zero.
This means of course that the risk of failure for the rally will stay high for several more weeks to come and a divergent retest of the June lows is still a credible scenario. I agree with asomani’s BSI report on this possibility and I think that the correlation score will be able to hold above its 20 dma, maybe after some whipsaws, if this retest do actually unfold.
In practical trading terms, until further notice, long setups do provide better reward-risk edges than short ones.
But initial stops should be kept tight under support areas and I think that selling on targets on strong days is a better strategy than exiting on trailing stops only for the coming weeks. I think it is too early to be greedy and a 2:1 or even 1.5:1 reward-risk tactic in short term trading is advisable. Once the correlation score will hold above zero for at least 2 weeks, I would then switch to a 3:1 reward risk strategy, avoid exiting on targets and trailing stops proportionally to ATR’s usual contraction in uptrends.
The same conclusions could be made for the IWM correlation with daily stages which is confirming a market structure backdrop similar to the one seen on previous successful technical trend reversals to the upside. Since it is usually lagging the correlation score with IBD ratings by a couple of days, it will help to confirm an “all clear” signal once it also holds in positive territory for at least 2 weeks.
Billy
14857

[Billy]

As an addendum to my post about waiting for "all clear" confirmations, here is the link to an interesting analysis pointing to other indicators to watch like the behavior of the 50 DMA.

http://ciovaccocapital.com/wordpress/index.php/stock-market-us/%E2%80%9Call-clear%E2%80%9D-not-given-for-stock-bulls-yet/

Billy