Transitioning - October 25, 2011

[Billy]

Guten Morgen Billy,

But in the article it is also written that ''a very negative long-term breadth development that doesn’t bode well for a sustainable rally.''

It still isnt clear to me. Did Mondays developments than override the concerns mentioned in the article?

Thank you
Daniel

Daniel,
You are correct with your quote, but the key notion here is “long term”. I wrote that sentence in the context of the weekly stages analysis which is changing very slowly with only one new set of data each Friday after the close. So, ''a very negative long-term breadth development that doesn’t bode well for a sustainable rally'' is not negating the possibility of a rally on the daily timeframe and simply emphasizes that such a rally has a high probability of being short term in nature. It is still too early to know if Tuesday was a turnaround or just another minor pullback in the emerging rally. Tonight’s reaction to the EU summit news will of course be the final referee.

The robot is neutral and objectively telling us that he cannot have confidence in the current market environment (non-stationary, see my other post in the VIT Forum) for initiating any high probability trade in any direction.

Billy

[dakuki]

Daniel,
You are correct with your quote, but the key notion here is “long term”. I wrote that sentence in the context of the weekly stages analysis which is changing very slowly with only one new set of data each Friday after the close. So, ''a very negative long-term breadth development that doesn’t bode well for a sustainable rally'' is not negating the possibility of a rally on the daily timeframe and simply emphasizes that such a rally has a high probability of being short term in nature. It is still too early to know if Tuesday was a turnaround or just another minor pullback in the emerging rally. Tonight’s reaction to the EU summit news will of course be the final referee.

The robot is neutral and objectively telling us that he cannot have confidence in the current market environment (non-stationary, see my other post in the VIT Forum) for initiating any high probability trade in any direction.

Billy

Thank you Billy for this clarification. It is very much appreciated. I am very happy to have discovered such an outstanding forum and service like yours.