• 556 days Will The ECB Continue To Hike Rates?
  • 557 days Forbes: Aramco Remains Largest Company In The Middle East
  • 558 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 958 days Could Crypto Overtake Traditional Investment?
  • 963 days Americans Still Quitting Jobs At Record Pace
  • 965 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 968 days Is The Dollar Too Strong?
  • 968 days Big Tech Disappoints Investors on Earnings Calls
  • 969 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 971 days China Is Quietly Trying To Distance Itself From Russia
  • 971 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 975 days Crypto Investors Won Big In 2021
  • 975 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 976 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 978 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 979 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 982 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 983 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 983 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 985 days Are NFTs About To Take Over Gaming?
How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

  1. Home
  2. Markets
  3. Other

The State of the Trend

Whether markets move up, down, or sideways, market breadth goes through short-term overbought/oversold cycles. During a very strong uptrend, the market will move sideways or slightly up during a market breadth overbought cycle, while the opposite is true for strong downtrending markets.

Gregory Moris' book Market Breadth Indicators is a good introductory guide to Breadth Indicators, which allow investors to keep track of such conditions, but by no means covers all of them.

On my blog I regularly update several proprietary indicators designed to keep track of overbought/oversold market breadth conditions, and will cover some of them in this and future articles.

Let's start with a weekly DJIA, QQQ, SPX overbought/oversold oscillator:

weekly DJIA, QQQ, SPX overbought/oversold oscillator
Larger Image

And follow-up with a couple of daily overbought/oversold breadth indicators:

daily overbought/oversold breadth indicator
Larger Image

daily overbought/oversold breadth indicator
Larger Image

Although all three indicators show a different sensibility to market breath changes, they all point to a short-term oversold condition. As a result, the expectation is for a sideways/up phase to follow (in the context of broken monthly, weekly and daily uptrends).

Uptrends
Larger Image

For short-term, one week price targets and areas of support/resistance, I'll turn again to daily channel analysis:

SPX


Coming soon: a new iPhone app that will help anybody, from novice to seasoned trader, make better investment decisions. Keep an eye on Twitter @citdates.

 

Back to homepage

Leave a comment

Leave a comment