longdong from the BSR page :
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The number behaves like an oscillator - it seems to range from a low of around 30 to a high of about 55 with a 7-8 pt range on any given day, and can increase or decrease rather suddenly just before a movement in the NASDAQ. This chart updates every 7 seconds in reali-time. The small circle ahead of the graph represents a short moving average, and turns red when the BSR falls below it and green above. The "Hi/Low" bars appear after 9:30:10 AM EST to show the range for the day. Currently, the graph restarts every time it runs out of space and there is no way to view a whole day's graph yet.
When the BSR is lingering near its high for the day or making new highs, it is consistent with an intraday uptrend continuing, as there are enough new buys coming in to sustain the current movement (analogous to keeping a foot on the gas pedal). A BSR that is near its low or making new lows is consistent with a downtrend. When the ratio pulls away sharply from either extreme, it indicates there has been a shift in the bull/bear balance, with not enough buys (or sells) to "fuel" the current trend (i.e., taking a foot off the gas). On some days, the lead time is not much, but it can happen as much as 5 minutes before the NASDAQ index will reverse, which is much more lead time than futures provide.
At 9:30, the BSR will start out with its range bands very close together, and then "choose" one or the other to push up or down. Odds favor long trades if the BSR starts making higher highs or stays near its high, and short trades as it pushes lower. Any pronounced move away from these limits can indicate a time to close trades. Sometimes, the BSR will start out moving in one direction, only to reverse to the opposite extreme while the Hi/Low bands are still close together, in which case the second direction usually prevails.
BSR numbers from 46 to 52 % accompany strong rally days when the NASDAQ has good breadth and volume, while the lowest BSRs, from 28 to 32 %, have been seen near market bottoms, the last on 5/26/2000. The number also rises sharply into the open and drops sharply at 4pm, when most buyers enter and exit.
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I haven't seen it stay above 51 for very long or below 29 for very long. 50 represents 50% buyers to sellers ratio, or 2 sells for every buy order. I dont know why people haven't thought to measure that before.
NENG still edging up - I wonder if they have some news coming out? |
