Clinton,
Normally, the information I use is found in two places... but I look at more than just these:
Around page MW106 you will find NYSE MEMBERS REPORT. In the section at the bottom titled Customers Odd-Lot Activity I look at Short Sales... you see they were 629 the week of 12/05 as compared to 420 the previous week. Normally, when the "current" (actually 2 weeks old) value is GREATER than the previous weeks, that is BULLISH for the coming week. And vice versa.
Around page 101 STOCK VOLUME under Daily Stock Volume I look at the Avg Price for each day. USUALLY, four days after the date for the most actives day you are looking at the day will be UP if the value of the most actives was greater than $60 and DOWN if the value was less than $60 and you can see all the figures for LAST week were BELOW $50.
The indicators can either reinforce each other or oppose... and for the issue you are reading they oppose each other which is why I suggested a really volatile week... up AND down..
So the weekly forecast is maybe 80% reliable and the daily forecast is 60-70% reliable... it is worth checking for so simple a set of indicators.
VIX I use through my MetaStock system... I plug the values in daily myself since I have no feed for them. And I use various indicators on that index. Currently we are on a VIX double buy... so it SHOULD be an interesting week next week... as I said last week!
Other things I check is investor sentiment, the CBOE MArket Report for ratio of index puts to equity calls (running about 1:3... I like to flip the ratio to give calls per puts - 3.4 or so (5 is high and 0.5 is low), Option Weekly Volumes Total Call Open Interest divided by CBOE Index Put Open Interest - running about 8:1 ( 20 is high and 5 is low), Advances-declines - I look for the LOWEST figure and it was 18,756 calls last week so that is bearish. Then when it is available, I check Traders' Committments (this option and future stuff is usually found a couple pages before the Market Lab on page MW100) cause THESE guys make their living on trading - ESPECIALLY the commercials. The S&P500 was neutral for changes but the E-mini seems to favor the put side... NOT a big change, though.
Checking all that stuff gives me a pretty good idea of what the market will do the next week and I am rarely surprised... usually, it is something that comes out of the clear blue that changes things.... but even the market moves coming out of the bank problems were forecasted by these simple things.
I really encourage you to become a master of TA... that is where our future lies. FA is often hidden and known in advance ONLY by the big guys... but TA is available to everyone!
Questions - fire away, please.
Bill |
