Today is Death Cross Day – August 11, 2011

[adam ali]

Billy,

Could you put up the SPY chart, if possible - thanks.

[Timothy Clontz]

Billy,

Two weeks ago I posted that we had hit the death cross in real value (not nominal value) on the S&P and pointed out a likely decline.

I posted the link, but here it is again:

http://stockcharts.com/h-sc/ui?s=%24spx%3Audn

You'll see that the decline happened a couple of days later.

I still got caught with my pants down because I wasn't using my own advice... but it was a lesson learned.

Basically all the dollar gyrations create false signals, and dividing the S&P by the inverse of the dollar ($SPX:UDN on stockcharts) filters out the noise and gives a truer signal.

Tim

[Billy]

Billy,

Two weeks ago I posted that we had hit the death cross in real value (not nominal value) on the S&P and pointed out a likely decline.

I posted the link, but here it is again:

http://stockcharts.com/h-sc/ui?s=%24spx%3Audn

You'll see that the decline happened a couple of days later.

I still got caught with my pants down because I wasn't using my own advice... but it was a lesson learned.

Basically all the dollar gyrations create false signals, and dividing the S&P by the inverse of the dollar ($SPX:UDN on stockcharts) filters out the noise and gives a truer signal.

Tim

Thank you Tim,
You certainly deserve to be credited with this one. Do you have any study or backtests of previous old signals?
Billy

[Billy]

Billy,

Could you put up the SPY chart, if possible - thanks.

Here are the SPY and QQQ charts.
SPY's floor outlook is very similar to IWM, with YS1 as ultimate support.
QQQ's low target is YPP.
Billy