• 9 hours Can Twitter Sway Economic Policy?
  • 12 hours Widespread Power Outages Hit New York City
  • 15 hours Equifax To Pay $700 Million To Settle Data Breach Case
  • 17 hours Netflix Struggles To Rebound After Subscriber Hit
  • 2 days $15,000 For Your Crypto’s Ticket To Visibility
  • 3 days The Next Fashion Frontier
  • 3 days What Is Africa’s Role In The New Silk Road?
  • 4 days Trump Was Right About The Dollar
  • 5 days Is Silver Gearing Up For A Rally?
  • 5 days World’s Largest Hedge Fund Turns Bullish On Gold
  • 5 days It’s Time To Spend More On Clean Energy R&D
  • 5 days Contrarian Investors Are Beating The Stock Market
  • 6 days Bulgaria’s Revenue Agency Falls Victim To Biggest Cyber Heist In History
  • 6 days Amazon Faces European Union Anti-Trust Probe
  • 6 days Commodities Are Having A Stellar Year
  • 6 days Bezos’ Next Big Project Could Be Worth $100 Billion Per Year
  • 6 days 3,600 Years Later, Climate Change Turns Mammoths Into $40M Market
  • 7 days Tesla, Apple Claim China Is Stealing Intellectual Property
  • 7 days EV Giants Duke It Out For Battery Dominance
  • 7 days Tech Billionaire Takes Aim At Google
Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

  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