The State of the Trend

By: George Krum | Sun, Apr 21, 2013
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One of the most fascinating things about market breadth is that, despite all the talk about high frequency trading (HFT) and all the distortions attributed to the endless stream of liquidity pumped into the system, it never wavers from its cyclical ways.

Based on our analysis of this behaviour, we stated last week that the market breadth pendulum has swung back close to the overbought zone, and it's time to expect a consolidation of the recent up move.

The pull-back started on Monday, and the SPX spent most of the week back inside the Cyprus box:

SPX Chart

The DJIA remains strong, and hasn't even tested the breakout level yet:

Dow Jones Industrial Average Chart

The Qs remain in the weakest position, but managed to claw their way back within the ascending wedge:

QQQ Chart

They may be getting some help from AAPL soon, as the stock has reached the strong support zone we identified here months ago:

AAPL Chart

The long-term channels continue to point firmly up:

SPX Long Term Channels Chart

and our trusted market breadth indicator suggests that the tide should be turning again:

CIT Dates Chart



George Krum

Author: George Krum

George Krum

George Krum is the author of the "CIT Dates" blog, and the following apps:

OddsTrader - combines the power of Hurst Channels with proper risk and position size management. For a web version see OT Signals below.

Gann 9 - the only financial app that allows users to effortlessly apply the legendary W.D. Gann's tools and methods for trading (including the Square of 9).

OT Trend - helps you quantify and forecast the seemingly random ebb and flow of stock, index or mutual fund movement.

OT Fibonacci - automates the process of applying Fibonacci numbers, ratios and time series to any security.

OT Seasonal - allows you to perform seasonal analysis on practically any security from around the world, and to build long-term forecasts and models.

OT Pairs - pairs trading, one of the most successful hedge fund trading strategies, is now available on your smart phone.

OT Pivots - combines the power of pivot lines with cycles to provide you with concise technical analysis and powerful trading signals.

OT Signals - a web app accessible from any browser, tablet or pc. It gives buy/sell/hold ratings for any instrument from around the world, and defines the trend and support/resistance levels.

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