Several more posts coming here this long weekend (two typed already with one lost and partially recovered). I want to edit them in 1-3 nicer well-constructed posts, with spell checking as both quite long.
But first, as part of my data analysis in bio TA, I am beginning to create TA fields in my tables, more to help as a guide than for hard analysis (i.e., 3 of 5x signal A worked - want to see if some base TA metric could have forecast the gainers). BUT out of curiosity, with weekly XBI RSI approaching 50 for the second time this year, I wanted to get a sense if crossing 50 is helpful or not historically, as 50 is a common stopping point in bearish markets. It is pretty ambivalent with a streak of 4 losers in 2009 and 3 since the top in 2015. Once 50 is crossed on a weekly CLOSING basis, 10% drops have ensued within 2 weeks the last three occurrences. We are at 49.25 per my calcs (49.38 on stockcharts.com). My other indicators are suggesting a couple percent up is likely this week, external factors excluded (or better said, external factors being average). I do think we may be looking at a hard correction in SPX back to 2050/60 but that might not be enough headwind to slow XBI down. Anyway up 2-3% would take us to high 50s and trigger the lookout warning. I would likely hold off shorting, however, as 2 weeks up feels too short given other recent rallies. I would hope for a choppier rally perhaps up/down/up/up/down etc. for a longer duration rally though. Otherwise 3-4 more weeks before the next correction at most.
More on the indicators run (and why I expect a 2% rally this week), on my market expectations (down slightly then mucho higher within weeks but if not look out below), and more later.
Jon |
