11/08/2013 Live Update

[RedKite]

A word of caution for swing bears. Yesterday was not just a down day it was a capitulation day, as measured by NYADV and NYDNV. Capitulation days usually occur near the end of a downtrend. It's very rare to get one at the start. Difficult to interpret but I've taken it as a signal to sell my shorts, which I'd been holding for a week, and watch for a while. I wouldn't be surprised by a drift lower into the middle of next week, but a capitulation day is usually associated with an imminent bottom not a continuing downtrend. So we'd need to see another setup forming if a real downtrend is to arrive. Almost everybody else is saying this is the start of a turn down, so this is an outlier opinion.

Not enough volume to be considered capitulation - not even close. Also, the selling was orderly and there was no hint of panic; this is not so on a capitulation day. VIX didn't spike though it did move modestly up.
I have never heard of a capitulation day being defined by the A/D line. Where did find such a definition?

Not using A/D line. This is purely on NYADV movement in one direction in the day, and separately very high NYDNV, I will take your point that you don't like it being called capitulation as it doesn't meet a classic definition. Point conceded. But if you backtest you'll find something useful in the measures. So let's call it something else, say submission. Either way, what happened yesterday is what happens at the end of downturns not at the beginning, and you'll find that's the case if you backtest the measures. So it's a strange event and not supportive of a downtrend to follow. I shall be more careful about calling it capitulation.

[Al_Dente]

Nyadv = 1400
Nydec = 1500
Up/dn volume ratio 1.3 to1
Internally, this is still a “chop” day … for now ….

[jack black]

Either way, what happened yesterday is what happens at the end of downturns not at the beginning, and you'll find that's the case if you backtest the measures. So it's a strange event and not supportive of a downtrend to follow. I shall be more careful about calling it capitulation.

This reminds me when I was trying to time market moves back in Octover 2007. I correctly identified top in the first two weeks, but when first wave of selling started circa 20th of October, it confused me and I covered. I missed a huge sell off at the end of October. 2013 is analogous to 2007 in many respects, but not identical for sure.

[fehro]

SPX 60m... breakdown retest... also 50% retrace of the move down..

[Daniel-David]

Regional Banks are loving the higher rate environment, and have surged higher all morning. Although they often correlate with homebuilding and construction ETFs like XHB and ITB, the latter have been pockets of weakness, since higher rates hurt them faster than economic improvement helps.

Oddly, the biggest divergence of the day is btw all domestic indexes and the foreign ones, esp. the emerging markets and Latin America specifically. Usually good economic news here helps them. Perhaps it's similar to the homebuilders-- higher rates hurts them faster.

[Cobra]

consolidation favors bulls.

[Out of Bounds]

A word of caution for swing bears. Yesterday was not just a down day it was a capitulation day, as measured by NYADV and NYDNV. Capitulation days usually occur near the end of a downtrend. It's very rare to get one at the start. Difficult to interpret but I've taken it as a signal to sell my shorts, which I'd been holding for a week, and watch for a while. I wouldn't be surprised by a drift lower into the middle of next week, but a capitulation day is usually associated with an imminent bottom not a continuing downtrend. So we'd need to see another setup forming if a real downtrend is to arrive. Almost everybody else is saying this is the start of a turn down, so this is an outlier opinion.

Not enough volume to be considered capitulation - not even close. Also, the selling was orderly and there was no hint of panic; this is not so on a capitulation day. VIX didn't spike though it did move modestly up.
I have never heard of a capitulation day being defined by the A/D line. Where did find such a definition?

Not using A/D line. This is purely on NYADV movement in one direction in the day, and separately very high NYDNV, I will take your point that you don't like it being called capitulation as it doesn't meet a classic definition. Point conceded. But if you backtest you'll find something useful in the measures. So let's call it something else, say submission. Either way, what happened yesterday is what happens at the end of downturns not at the beginning, and you'll find that's the case if you backtest the measures. So it's a strange event and not supportive of a downtrend to follow. I shall be more careful about calling it capitulation.

Fair enough. If your looking at Volumes and numbers of movers, the $TRIN did top out yesterday at 2.21 and that is very oversold. But I read that as very short term (15 minutes or so). I would be intererested to see if spikes like that indicate a bottom longer term but I find it hard to think we are at a bottom of any kind of meaningful move when we started the day at an intraday all time high!

[Al_Dente]

Redkite:
Can u post a chart showing your NYADV movement and your NYDNV spike
thanks

[uempel]

Update SPX:

[RedKite]

Either way, what happened yesterday is what happens at the end of downturns not at the beginning, and you'll find that's the case if you backtest the measures. So it's a strange event and not supportive of a downtrend to follow. I shall be more careful about calling it capitulation.

This reminds me when I was trying to time market moves back in Octover 2007. I correctly identified top in the first two weeks, but when first wave of selling started circa 20th of October, it confused me and I covered. I missed a huge sell off at the end of October. 2013 is analogous to 2007 in many respects, but not identical for sure.

And that's exactly what happens to me from time to time. It might happen this time too. I'm open for another setup next week. I'm just closing out on what happened this past week, no longer seeing next week as a continuation.

[jack black]

Heads up. Intraday chart on XLF is showing triangle breaking down. It may be leading.

[taggard]

Either way, what happened yesterday is what happens at the end of downturns not at the beginning, and you'll find that's the case if you backtest the measures. So it's a strange event and not supportive of a downtrend to follow. I shall be more careful about calling it capitulation.

This reminds me when I was trying to time market moves back in Octover 2007. I correctly identified top in the first two weeks, but when first wave of selling started circa 20th of October, it confused me and I covered. I missed a huge sell off at the end of October. 2013 is analogous to 2007 in many respects, but not identical for sure.

very much appreciate your honesty. would you care to share any solutions you might have come up with to this perspective error?

[joegamma]

A word of caution for swing bears. Yesterday was not just a down day it was a capitulation day, as measured by NYADV and NYDNV. Capitulation days usually occur near the end of a downtrend. It's very rare to get one at the start. Difficult to interpret but I've taken it as a signal to sell my shorts, which I'd been holding for a week, and watch for a while. I wouldn't be surprised by a drift lower into the middle of next week, but a capitulation day is usually associated with an imminent bottom not a continuing downtrend. So we'd need to see another setup forming if a real downtrend is to arrive. Almost everybody else is saying this is the start of a turn down, so this is an outlier opinion.

Not enough volume to be considered capitulation - not even close. Also, the selling was orderly and there was no hint of panic; this is not so on a capitulation day. VIX didn't spike though it did move modestly up.
I have never heard of a capitulation day being defined by the A/D line. Where did find such a definition?

Not using A/D line. This is purely on NYADV movement in one direction in the day, and separately very high NYDNV, I will take your point that you don't like it being called capitulation as it doesn't meet a classic definition. Point conceded. But if you backtest you'll find something useful in the measures. So let's call it something else, say submission. Either way, what happened yesterday is what happens at the end of downturns not at the beginning, and you'll find that's the case if you backtest the measures. So it's a strange event and not supportive of a downtrend to follow. I shall be more careful about calling it capitulation.

i play around a bit with standard deviation on various breadth and internal ratios, they looks pretty but cannot seem to see until after the fact, fwiw----soo we keep digging... will load some current views this weekend

[TWT]

$SPX: Ending Diagonal wave (C)

[jack black]

Either way, what happened yesterday is what happens at the end of downturns not at the beginning, and you'll find that's the case if you backtest the measures. So it's a strange event and not supportive of a downtrend to follow. I shall be more careful about calling it capitulation.

This reminds me when I was trying to time market moves back in Octover 2007. I correctly identified top in the first two weeks, but when first wave of selling started circa 20th of October, it confused me and I covered. I missed a huge sell off at the end of October. 2013 is analogous to 2007 in many respects, but not identical for sure.

very much appreciate your honesty. would you care to share any solutions you might have come up with to this perspective error?

I'm afraid I have not much to share, I'm a slow learner
All I know that macroeconomics and longer timeframe setups can mess you up.

[joegamma]

Either way, what happened yesterday is what happens at the end of downturns not at the beginning, and you'll find that's the case if you backtest the measures. So it's a strange event and not supportive of a downtrend to follow. I shall be more careful about calling it capitulation.

This reminds me when I was trying to time market moves back in Octover 2007. I correctly identified top in the first two weeks, but when first wave of selling started circa 20th of October, it confused me and I covered. I missed a huge sell off at the end of October. 2013 is analogous to 2007 in many respects, but not identical for sure.

very much appreciate your honesty. would you care to share any solutions you might have come up with to this perspective error?

For Later....hello taggard: thanks for the PMs! you nudged me to resume some meditative practice, focusing on Awareness, Acceptance, and only then, Action ON WHAT IS, not what I want or what I expect, in this line of being mode how would this act of covering too quick be described as "perspective"?
TIA

[RedKite]

Redkite:
Can u post a chart showing your NYADV movement and your NYDNV spike
thanks

Here they are. See the solid bar in NYADV, similar to the October bottom, and many others in the past

And NYDNV over my regular limit

As Out of Bounds said, this is an odd time to get a bottoming signal, just after a major high. And I agree. But there it is and I'm respecting it until I see it's not valid, which could even be next week.

Have to rush out now. Will be back later in the day.

[fehro]

VIX 15m... today's high was the 20d SMA mid BB band on the daily. fwiw.

[Cobra]

3rd test of high, breakout is more likely.

[uempel]

Update: