NYAD Advance-Decline and SPX Daily Charts

The +2100 and -2100 levels on the NYAD signal near-term reversals. Keystone calls it the Blackjack 21 Trade since typically you can short the markets at prints of +2100 and higher, and/or go long the markets at prints of -2100 and lower, for VST trading only. So the first day of August prints an elevated NYAD which creates the market top. Then the low on 8/6/13 which led to the low in the markets the following day. Then the 8/8/13 high which pegged the exact market top that day as well.  Then the 8/15/13 low in the NYAD, an uber low at -2500, created the bottom at SPX 1640 four days later. Then the +2000 NYAD on 8/22/13 which creates the market top two days later at 1670. Yesterday the NYAD prints -2200 signaling a near-term recovery rally at hand. The 8/15/13 is atypical behavior, taking four days to establish a price extreme, the 1 or 2 day time period appears more average.

Thus, with the -2200 yesterday (8/27/13), the anticipation would be a recovery move for SPX for a few days, and this timing coincides with expected pre-holiday market buoyancy in the back-half of this week, as well as the beginning of the new month buoyancy on tap. The TRIN Arms Index also jumped to 2.65 so a relief rally would be in order to relieve some of this bearish pressure. So the binoculars are out today and tomorrow to spy a near-term market bottom and start of a relief rally. 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.