Saturday, October 3, 2015

Aug-Sept 2015 Correction Over

The daily NYSE A-D line has made a probable double bottom at about 89,000 and has been moving up smartly from that area. http://stockcharts.com/freecharts/gallery.html?s=%24 NYAD

The NYSE McClellan Oscillator, a derivative of the A-D line has created a sharp uptrend line from -105 through a rising bottom at -45.
http://stockcharts.com/h-sc/ui?s=$NYA&p=D&yr=3&mn=0&dy=0&id=p83733137120

I would like to see high plurality days in which the A-D line exceeds +1500 and even +2000. We have seen two such  breadth power days since the 1872 SPX intraday lows on Tue, Sept 29. On Wed, Sept 30 the NYSE A-D line posted a +1585 and on Fri, Oct 2 a  +1590. I would like to see some 2000+ days, but if we are in Elliott Primary Wave 5, they might be rare because in the final stage of a bull market the majority of stocks typically lag the large caps in performance.
That raises the question of how far we are from the end of the bull market. If we are in Elliott Primary Wave 5, then we might not be entitled to expect +2000 plurality days in the NYSE A-D line. If we are in a degree lower, such as Major 5 of Elliott Primary Wave 3, then we should expect some mega up days for the A-D line of from +2000 to +2500.
On the same subject, the S&P 500 suffered a maximum decline so far of 12.55%, which is low for a Primary degree decline. The Principal Mid-Cap Growth Fund has only lost 12.24% to date during this decline. If this correction were destined to go longer and lower, then undoubtedly greater percentage declines would occur for most indexes and funds. But it appears to me that that is not going to occur; I believe for the reasons explained above that we are in an impulse rally mode of a wave of some unresolved degree. We should be on the alert for a Zweig Breadth Thrust, especially if this rally is at an earlier stage than Primary 5.

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