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Thread: 1-16-2016 Before the Open

  1. #1
    Join Date
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    1-16-2016 Before the Open

    Watch lists are updated. The market is correcting in an oversold state; as such, it is difficult to generate a profitable scenario for mid-long-term investors. Gold appears to have bounced, it might be possible to buy pullbacks.

    One of the market factors I watch is NASDAQ average true range, see chart. In a rising market, when I see ATR making higher lows and higher highs, it can portend a move to a bear market. When ATR goes into an uptrend coincident with a market pullback it suggests just that, a pullback that will be met by higher market highs when the pullback completes. We have the former condition with a rising ATR since late 2014. I hesitate to place much credence in this because most of my market topping methods have broken down in the Fed-driven frenzy. However, NASDAQ ATR looks similar to the TED spread which is doing the same thing. Perhaps we are returning to a market where traditional methods work again. So, don't fall in love with the upside and look for short-side opportunities if and when the market rallies.

    Name:  NASDAQ ATR 1-11-2016.GIF
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    Mike Scott
    Cloverdale, CA

  2. #2

    Before the Open

    Quote Originally Posted by Mike View Post
    Watch lists are updated. The market is correcting in an oversold state; as such, it is difficult to generate a profitable scenario for mid-long-term investors. Gold appears to have bounced, it might be possible to buy pullbacks.

    One of the market factors I watch is NASDAQ average true range, see chart. In a rising market, when I see ATR making higher lows and higher highs, it can portend a move to a bear market. When ATR goes into an uptrend coincident with a market pullback it suggests just that, a pullback that will be met by higher market highs when the pullback completes. We have the former condition with a rising ATR since late 2014. I hesitate to place much credence in this because most of my market topping methods have broken down in the Fed-driven frenzy. However, NASDAQ ATR looks similar to the TED spread which is doing the same thing. Perhaps we are returning to a market where traditional methods work again. So, don't fall in love with the upside and look for short-side opportunities if and when the market rallies.

    Attachment 34059
    Thanks, Mike. Helpful -

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