NYSI NYSE Summation Index Daily Chart Rising Wedge Overbot Negative Divergence

The NYSI is a useful tool in helping identify market tops and bottoms.  In August-September 2011, the falling wedge, ovesold conditions and positive divergence created the bounce for the NYSI but the markets did not follow along higher until October. The 13 MA crossed above the 89 MA to verify the stock market rally.  In February this year, the NYSI topped out and received a spank down form the rising wedge, overbot conditions and negative divergence, however, the stock market kept moving higher. The 13 crossed down thru the 89 in early April to identify the market top.

In early June, the falling wedge, oversold conditions and positive divergence bounced the NYSI higher which nailed the market bottom dead-on. The 13 moved above the 89 MA in early July to confirm the stock market rally and verify that the bulls rule the roost. Over the last cople days, the NYSI placed a higher high as compared to the July high, creating a rising wedge. The RSI and stochastics are overbot but most importantly, the negative divergence is strong indicating that the NYSI needs a spank down and that has just started. Look for the 13 MA and 89 MA cross in the days ahead which would confirm market bearishness moving forward.  The first step in making the 13 MA move lower is for price to stab down thru the 13 MA; this occurred albeit by two points (NYSI is 622 and the 13 MA is 624). Projection is for the NYSI to continue lower with the 13 crossing down thru the 89 MA in the month or two ahead. Weakness in NYSI corresponds to weakness in the broad indexes. 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.