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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 679.68+0.7%Nov 26 4:00 PM EST
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To: bobby beara who wrote (33589)11/17/1999 4:45:00 PM
From: FJV  Read Replies (2) of 99985
 
Has anyone noticed the XBD today? It looks like a strong reversal day. The 4.7% haircut it took today essentially matches yesterdays gain. The same % move in the Dow would have been good for over 500 points today.

Now take a look at daily charts of the XBD index over the last few years. This type of price action seems to portend badly for the broad market, especially if we have a lower weekly close on the XBD on Friday.

Another sign of distribution seems to be in the divergence between the tick and the trin on the NYSE over the past few trading sessions. The trin is clearly overbought, with an hourly average of ~.70, but the average hourly tick over the past four trading sessions is approx.-250. It is my understanding that such a divergence is a fairly clear sign that the market (at least the big board) is in a distribution phase.

Any comments? If my logic or observations are faulty, I would appreciate your input. As a lurker, I appreciate the volumes of information I have gathered by the likes of Don Sew, Bobby Beara, LG, Heinz and the rest of you bright guys. Sincere thanks and regards to all.

Franco

edit - average hourly TICK is -250, not trin as I had originally posted. FJV
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