1/24/12 Before the Open

When I looked at Jerry's leader index this morning with the Doji patterns I went back and looked at the NASDAQ which also shows a Long-Legged Doji candle pattern. Perhaps this is signaling a change in direction, certainly some indecision.

I was asked about the zero distribution count. First, an initial Follow-Through Day (Buy signal B1) will zero the count. This occured on December 20. We have had two real distribution days since (12/21 and 12/28). No other days met the criteria of down 0.2% or more on volume higher than the day before. Depending on your data feed you might say different. Volume is notoriously different depending on your data feed. I use MarketSmith which is identical to the data that O'Neil money managers use for managing his portfolios.

A distribution tally is kept that counts the number of distribution days in a trailing 25 day window. So you might think the count should be two now. The other criterion used is that a distribution day is removed from the count if the market on an intraday basis exceeds the close price of a distribution day by 6% or more. When the market advances this far the fact that distribution occured that far below the current price is less relevant. On 12/28 the NASDAQ close was 2589.98. On 1/18/2012 the intraday high was more than 6% above this price. This removed this day from the count. Similarly the 12/21 distribution day was removed on the day before.