Thursday, May 16, 2013

NYAD NYSE Advance-Decline Daily Chart

The NYAD shows how the number of advancers are leaking lower over the last month as the equity markets move higher. This is the opposite of what would be expected for a robust market. The NYAD diverged lower ahead of other market tops. Typically, a +2000 or -2000 print is best to firmly identify a market reversal but in recent months the 1500 levels have dominated. Note how the recent action is narrowing into a tight sideways range and about to make a commitment up or down. A move to +1500 or higher will identify the market top for the recent rally move, or, the move down towards -1500 can begin immediately and will identify a near-term market bottom after a sell off in equities occurs. The idea would be to play the short side until the -1500 or lower print occurs. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

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