Stock Market Bottom Getting Closer
Stock-Markets / Stock Markets 2011 Jun 13, 2011 - 06:45 AM GMTBy: John_Hampson
I present 8 more bottoming indicators, or indicators that are now at further extremes:
1. CPCE
Source: Cobra's Market View
2. Collection of indicators at bearish extremes
Source: Sentimentrader
3. Put Call Ratio
Source: Traders Narrative
4. NYSE Stocks at 4 week low
Source: Cobra's Market View
5. Bullish Percent Index
Source: Stockcharts
6. SP500 stocks above 50 MA
Source: Indexindicators
7. AAII Bullish Sentiment
Note the level reached is on a par with previous bull market lows. Only a new bear market should necessitate lower levels.
8. PPO divergence
Source: Astrocycle
Now here's what I'm looking for to finalise the bottoming deal:
Quantifiable Edge's Capitulative Breadth Indicator dropped to 5 on Friday, despite the market fall. So still awaiting decisive move to around 10.
Tied in with this, we haven't seen a high volume capitulation or bottoming hammer candle. I am looking for that kind of washout selling and reversal, likely intraday.
We also lack the spike in volatility that is also normally associated with a bottoming:
Source: Biiwii
Price-wise, a drop to around 1250 could mark the base, at dual support. But we should also allow for a fake-out overshoot and subsequent reversal, as the market loves to deceive:
By time, recall that we approaching the full moon on Wednesday and we are still in the Puetz crash window, both giving downward pressure. However, the geomagnetism forecast around this last weekend has been only moderate and we are now moving into a window of quiet, which should remove that negative.
Ideally therefore, the final selling washout should materialise going into this mid-week, presenting a buying opportunity thereafter. This idea is supported by copper which has potentially already bottomed ahead of the market, leading the action by several weeks:
Source: Pug SMA
John Hampson
John Hampson, UK / Self-taught full-time trading at the global macro level / Future Studies
www.amalgamator.co.uk / Forecasting By Amalgamation.
© 2011 Copyright John Hampson - All Rights Reserved
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