Where is the stock market now

The delta market sentiment indicator is at 19.6 currently.

Screen Shot 2018-10-20 at 11.14.55 AM

the percentage of S&P 500 stocks that closed below their own resepctive 50 days SMA has fallen to an extreme of 15 % (out of say 100 stocks, only 15 stocks are above their own 50 Days Simple Moving Average (SMA))

According to Delta newsletter – “Since January, 2009 through today, we have only had eight instances when the MSI declined below 20%.  Shown below is a chart of the MSI since January 2, 2009.  Buying the market when the MSI dropped below 20 previously during this bull cycle has benefitted patient investors willing to incur heightened market volatility”

When the Delta MSI drops below 10%, Delta’s MSI based strategies may buy stocks.  During the current bull cycle beginning in 2009, this has happened only twice.  Over the past 27 years, it has happened five times.  These times were:

  • August 1990
  • September 1998
  • July 2002
  • October – December 2008
  • August 2011

The chart below shows the price change in the S&P 500 from the closing monthly price when the MSI went below 10% to twelve months and three years later.  The chart does not include the additional benefit of dividends during the holding periods.

Be prepared to enter soon into the market


Five days decline in s&p 500 since august 29th top

  1. Present price action has been down. There has been a cluster of high volume selling, august 30th, Tuesday and Wednesday. red flag.
  2.  both S&P 500 and NASDAQ above 22 SMA. green flag
  3. Accumulation and distribution rating has fallen since August 29th top from C- and B for S&P 500 and NASDAQ respectively to D and C-. Red flag.
  4. A/D line for NYSE – 1649 Stocks down in 1.95 billion volume and 1138 stocks up in 1.07 billion. volume actually declined but stocks down on double the volume. Red flag.
  5. % of S&P stocks above 50 days SMA is 67.42 and it stabilized last 3 days with a bounce of 64.43. – Green flag.

decision : Be in QLD avoid long on NQ

Yesterday made 22 points on NQ because of price action.