Wednesday, July 25, 2012

NYSI Working Magnificently - A Major Sell Signal

Good evening my friends.  As you may have noticed, I haven't been in much of a mood to write as of late.  I'll cut right to the chase... sometimes people can piss me I find people to be so aggravating that I get to the point when I finally just say "to hell with it, I'll just keep on doing what I do in my own office every day and just use it myself".  And for the most part that's what I've been doing for the past couple of mumfs.  [Don't ask me why I like to spell that word that way because I don't know.  It makes me chuckle I guess.]

BUT... tonight I read a comment on our friend Pretzel's site that inspired me to drop off a comment there.  The comment that jolted me out of the 'I don't feel like writing' coma was written by a great participant named 'aweedram' wherein he offered a chart that looked "very doable" to me.  I certainly appreciated his effort and his vision, BUT I also have good reason to believe that the odds of it actually developing are very, very slim.  So I left a comment on Pretzel's forum (not on his fabulous EW analysis site) in response to 'aweedram' and basically it went like this:


BUT... I.also have to defer to several studies I have ongoing at all times. God, there are so many of them but the ones pertaining to market internals are now speaking volumes. Here's a daily chart of the Summation Index for the NYSE:

NYSI Daily - Click here for a live and updating version

What I've been watching is the negative divergence seen at the top of the recent action (red and yellow arrows). First of all, the histogram was indicating that a reversal in NYSI was imminent. What wasn't clear was whether or not the market would roll lower with it. If the market does not roll lower with NYSI, as seen in Feb. of this year, then a different form of neg. divergence is setting up between NYSI and the market itself (NYSE). In a case such as that, we know the bulls are still in charge and we'd have to wait for some form of a second rollover in NYSI that coincides with the market finally turning south. We saw that in March of this year and all that really happened at that time was that NYSI simply consolidated until the NYSE caught up with it and finally decided to tank. At that time they both keeled over and puked at the same time. Kind like me and my old drinking buddies used to do.

However, as I noted on this chart back on June 12th, if the market rolls over FIRST or COINCIDENT WITH a NYSI that has turned lower... watch out because it's the real deal. The chart is actually from this article which I had published regarding the coming bounce.  And man... did the market ever bounce.  Five ugly times to be exact.  But as demonstrated in the original publication of the chart... we have a REAL DEAL goin' on here now. And all indications are that we probably can't even expect much of a bounce until August 6th or 10th, thereabouts. Not a big bounce at least. Some readers might recall my explanation about 'why' momentum indicators do not produce a divergence at the top of a wave 2 or a wave C. Although not exactly the same, this is very similar to one of those cases. In that previous explanation I was referring to an RSI or stochastics indicator. But the 'cause' is the same in this case... tthere will be no more upward waves to cause a neg. divergence between NYSI and the NYSE.  Please don't misunderstand... that doesn't mean there won't be a bounce.  It just means that if there is a bounce, it will be a dud in that the market will not reach new highs.  But to reiterate, even so... we shouldn't see any bounce of any significance until somewhere around Aug. 8th give or take a day or three.

When I look at the futures tonight, and at all the pos. divergences on every time frame, I'm certain a bounce is coming. But according to the much more significant and reliable signals coming out of the market internals data, it's not likely going to be much of a bounce... just another great shorting opportunity. But I've learned my lessons by now... the Orcs of New York are so powerful that God only knows what they can do. My confidence has been shaken to its very core by those bastards but I'm going with what I'm seeing... this market is gonna tank big time.

I hope everyone out there is doing real well and that you're able to capitalize on the markets in the weeks ahead.  Personally I don't think there's much chance it's going to be anywhere near as choppy as it has been since early June.  Think... "more linear".

Until next time... whenever that is... stay well!

Tranquility Base


  1. Hey AR,

    I've been missing your writing.  Don't let the bastards get you down, okay?

    You put together great charts.  Lots to think about, as the downside case is so clear -- which is what makes me really nervous about betting on the downside, lol.  I see that is shouting Hindenberg Omen tonight.  Any blips from your HO-meter?

    All the best my friend,


  2. Hi Buddy.  Chartrambler just said the same thing on the last post, that people have been bringing it up lately.  I'm always amused to see who is going to be the first site to issue an erroneous statement that the HO has issued a signal.  The last time it was some clown whose site is no longer even active.  But I'm surprised that even Sentimentrader has their head up their asses too. 

    The HO has been
    out of commission and "absolutely disallowed" from issuing a signal
    since May 3.  It's 'still' not back on line although if we get a bounce
    over the next few days it will come back on line for the first time in
    10 weeks.  Here's a link to the chart that explains "why"
    it's out of commission.  It's absolutely cast in stone that the 50 day
    MA on the NYSE must be rising.  It isn't... not yet.  But it won't take
    much over the next couple of days to put it right.  Only then can we
    even begin to entertain the HO at all.  So it absolutely HAS NOT issued any signal.  It's guys like Sentimentrader who are largely responsible for all the "false signals" that the trolls then just love to use as excuses to bash those who "really know" WTF is going on.

    Late last week I 'did' issue a heads up on Seeking Alpha that the HO 'might' come on stream this week.  But since the market has tanked pretty good since that day, the 50 day MA has had a very difficult time catching up.  It wants to roll higher and as soon as the market quits tanking, it 'will' turn higher based simply on the price action of 50 days ago alone.

    All the best to you too my friend.  You're one of the very best.

    Love ya,

  3. Trolls being trolls for the billiumf time?  Got to quit grinding those toofies!

    (Did I get the mumf-accent right?)

  4. Had a feeling it was something like that.  Apparently sentiment trader needs to spend more time perusing your site!  As do I.  The new website has me working ridiculous hours, but having fun too.

    Been lots of talk about the 50/200 cross coming up, but the 50 is looking like it wants to bounce here as we start shedding some lower days (even if we just stay level.)  On the other hand, we're back to having to pull money off the table overnight/weekends for fear that something weird is going to happen when no one's watching.

    There's certainly no shortage of reasons for the market to crash right now -- along with the global economy.  Which is probably what they want everyone thinking.   Did you happen to catch the NY article/leak last night re QE?

    I think TPTB are going to do their level best to prevent another melt down if they can.  I think it's "pull out all the stops" time.  I took a look at the dollar yesterday, and it's tagging multiple harmonic lines all at once -- should be good for a decent reversal soon.

    One foot in front of the other, right?  All the best, bud. 

  5.  Ahh!    Ahh!    Ahh!  

    I was wondering why you weren't all over the blogs when people
    started to say that an HO event had happened! 

    Hope you are well. :)  ... thanks for popping up with your always interesting perspective and analysis from time to time.

    You will like that my 3 sisters just arrived in Italy today (without their husbands)! ... and we have this special opportunity in our lives to travel around Italy together (and have them stay with me in my village for a week or so) ... just the 4 of us! 

    Speaking of Italy, I'm waiting for you and your family to come and help my cousins harvest the olives in early November some year!  I was delighted to see your continued interest in this a few months ago! 

    All the best, Peter

  6. Yes I've been noticing the dollar lately too and have commented a time or two that it starting to look kind of tired..  It's sure starting to look toppy in my humble opinion, both in the pattern and definitely with its momentum indicators.  Neg. divergences all over the place.  Your great chart concurs 100% with what I've been pointing out this week (but without the benefit of your supporting evidence... well done buddy).  But I also don't think it's going to pull back very far... maybe to the 81.50 level would be a reasonable guess I think.  One reason I doubt the dollar will pull back far is that it's currently the Euro's turn and the Aussie's turn, and 'everybody's turn to turn lower.  If the dollar turns lower right along with every other currency in the world, there would only be one currency left... gold.  And I don't think the FED want's that either since an explosion higher in gold would pretty much signal that the game is over... fiat currencies are dead.  So I think the dollar will just pull back relatively mildly... after all, we also still have that 'massive, once in a century deflation thing' to deal with first.  That alone should drive intense buying pressure onto the dollah I would think.

    You bet pardner... one foot in front of the other.  Hope you're staying well.

  7. Well hello there Peter!  How's my favorite Italian?  You bet, my daughter and I have indeed discussed the idea of going over to Italy to help your family pick the olives and she's all over it.  She can hardly wait to go there with me.  But I'm afraid it's going to be a while before we can get there.  Right now my daughter is flying back and forth between Calgary and Tacoma, Washington every Monday and Thursday, on loan to the American offices of Delloite & Touche who had sent out a rather urgent request for an expert in her field.  She's one of only 5 people in Canadian offices of Delloite who have the combination of the right University degree plus experience in doing what they need done.  The Americans either don't have 'any' or they're all busy... not sure which.  She's helping them implement an entirely new "health informatics" system in 40 hospitals in Washington State.  So it might be a year or two before we can get to Italy but man, I sure want to go and so does she.  We want to see Ravello too, and I understand you live fairly close to there.  Some day :-)

  8. No, the trolls aren't bothering me these days.  Because I'm not here, lol.

  9. Hi, AR.

    Yeah, as I see it today we're just finishing up the C of small 2 today to alleviate s/t oversold conditions.

    With respect to the dollar, I think the euro dies before it (especially if Germany leaves), which is going to cause a spike in the dollar as the euro hyperinflates.

  10. Yeah I think you're dead on about the Euro tanking first.  About today's action though, to be honest I was thinking it was going to bounce more than this.  But after looking at it with your thought in mind, yup... we could be doing just that, finishing up a small wave 2.  But I'm also a bit suspicious of that because I get the sense that not enough time has passed.  I mean I think the wave 2 could evolve into something a bit bigger so that it at least gets into the gaps above.  It's hard to know isn't it?  But there's still an hour and a half to go and maybe by the end of the day we'll have a bit better idea.

  11. Yeah.  This up move could still be C of A of a flat 2, or 1 of 3 of A, or even B of B, or (the bulls' favorite) 1 of 3 of 1 of 3.

  12. How about that. I was just thinking about posting a big brave call that a plunge would start (or resume) within 5 trading days, based on nothing but the H&S on the GDOW and the place I think we are in the larger degree picture. But you gotta figure a bounce before and around July 31-Aug1 when traders try to front run another QE hope tizzy.

  13. That timing sounds just about perfect to me.  From there, the market is so likely to tank it's not funny.  Tank until at least Aug. 8th or so before we even get a breather.  That's what I'm planning on anyway, lol.

  14. You're welcome Sugarman.  Wow... haven't seen you anywhere for a long time.  Nice to hear your voice.

  15. Likewise man.  Glad to have the opportunity to read some more of your thoughts.
    One of the greatest impediments to internal triumfantness is a lack of rolling-over market-wise.  I've already gotten impatient...

  16. Still a keeper:

  17. AR great to see you post some thoughts.  I've been keeping my head low as well, partly because I've been traveling a lot on business but also because I've been developing and testing an idea I had for a market indicator based on the NYSE tick.  So far it looks really good, been debating whether I want to share it (most recently signaled today's ramp up late yesterday PM).
    I agree on IT outlook, I was leaning bullish until the action late last week into Tuesday this week, looks decidedly bearish at this point - the rally of the last couple days is destined to fail IMHO.

  18. Last month I accidentally came across an article on this page about the Hindenburg Omen. Yesterday I saw an article on page

    HO is trigert. Maybe a short comment on the HO, please.

  19. Thanks for that link Rozamunda.  As a subscriber to StockCharts I certainly have faith in their commentary.  But unless there has been a recent rule change that I'm unaware of, even Arthur Hill is wrong in his article (the one you linked me to).  The rule states (unless it has been changed and I'm unaware of that change) that the 50 day MA "must be rising".  The rule doesn't say "price has to be above the 50 MA regardless of whether it's rising or falling".

    So I'll have to check with the creator of the Omen, Jim Meikka and/or Arthur Hill to see if there has been a very recent change that even I'm unaware of.

    Thanks for those links.  I'll look into it.

  20. Hi, good to see your back. I really enjoy your site. As I said before I have a link to my site (chartlearning) just add a dot com. If its possible I would love a link back!

    We seem to post a lot on the NYMO and the NYSI pretty interesting, although we tend to do different analysis. Always enjoy reading what others have to write about it!

  21. Hi JF.  Thanks for posting my link on your site.  I didn't realize you'd done that but I gather you've told me before?  If so, I apologize for having missed that.  In any case... it's done.  Your site can now be found on the right sidebar of this blog. 

    "...although we tend to do different analysis."

    That's what makes the world go 'round my friend.  I certainly appreciate the visions of others and although I'm pretty confident in my abilities with TA, I'm also very impressed with the types of studies that others do.  We're all in it with the same goals.  Wishing you the best :-)

  22. Keep an eye on the NYMO and the -80 level. If it stays above ST, I'd stay bullish.

    Hey, BTW, I've taken the plunge and started my own blog. [cheers] 

    I was really starting to feel like I was abusing my stay here and kind of hijacking your blog with all my posts, and you know what they say, necessity is the mother of invention, and when you've
    got tons of charts to post and you're homeless so-to-speak, you just have no
    choice but to get to work, and that's what I've been up to (in what little spare
    time I have) and also why I've been so quiet.

    Take a gander and let me know what you think. TIA

  23.  the Orcs of New York.  Yes they can pull rabbits out of the smallest hats. Obviously they are watching the charts too and constantly attempt stick saves each day and chart reversals at critical points. Do not get discouraged AR, they can only keep so many plates spinning in the air at one time. Eventually this will all come down with a crash but I am constantly amazed everytime they add another plate. 

  24. Congrats HighRev.  Well done.  No way did I think you were hijacking the blog bud, you're one of the good guys for sure.  Your site can be found over in the right sidebar of this page now. :-)  I look forward to seeing what else you decide to put up there.  Feel free to post any of your charts and links 'here' too.

  25. Well whataya know... one of me best buddies from Seeking Alpha.  How y'all doin' DG?  BTW, I posted an update on SA stating that the HO has indeed finally come back on line.  To be honest I haven't even been watching the numbers for the new highs and new lows that closely since the HO had been switched off.  But in checking yesterday's numbers, they were in the ballpark.

  26. No problem bud.  I think it inspires people to sign up properly and get an avatar, lol.

  27. Yeah I told you before no worries. Thought you didn't like me lol. But I really enjoy the work on this site so I decided to try again. Also I am a huge fann of Tom McClellan. That so cool you talked to him on the phone! Do you know him personally or was that a random call? I subscribe to all his work and constantly email him questions. 

  28. After I had emailed Arthur Hill I started to get the feeling it might be days before I heard back from him.  But since I was disturbed that even Stockcharts has the rules wrong, I decided that I just "had to" find out the answer real quick.  So just on a lark I phoned McClellan Financial Publications and a man answered the phone.  I told him who I am and mentioned that I wanted to speak with Tom McClellan regarding the requirements for the HO.  The guy perked right up and said "this is Tom McClellan".  We had a great chat and a few chuckles.  At least I now know what he thinks of a certain American business news channel, lol.  In any case, Tom knows the rules with 100% certainty and he informs me that so do I, lol.

    He's coming up to Banff for the Commodities Conference which is only 60 miles from here.  He told me he's never been to that part of the world but was very much looking forward to it because he'd heard it was quite beautiful.  I told him "you ain't gonna believe it", lol.  It truly is a stunningly beautiful part of the world around here.  I've lived here all my life and still can't get to the mountains often enough.

  29. Thats pretty cool! When the fake trigger happened he discussed it in the newsletter, and when everyone was saying the Omen was triggered it was driving me nuts as well. I know how you feel.

    I saw he was going, and I really wanted to go, but unfortunately still in school :-(. Sound like I am going to really miss out.