13 October 2011
An inflection point?
Welcome to the October edition of Investors Intelligence Insight. Markets are now attempting to hold their ground against the prevalent downtrend, and we take a look at what some of our indicators have to say on this potential inflection point.
Certainly, we are at a potential watershed. Benchmark government bonds have lost their upside momentum as the flight-to-quality rotation becomes exhausted. Meanwhile, the major indices are attempting to complete medium-term base formations, as can be seen on this weekly candlestick chart of the S&P500.
Whether this rally will have the legs to carry it forward to the year-end remains to be seen. However we would highlight that its is occuring against a background of very low readings on our Advisors Sentiment indicator (see more below) - a condition that has led major rallies for many years.
On other matters, we have two seminars from the Fullermoney team scheduled for next year - our colleagues in the Investors Intelligence London office. In 2012, Eoin Treacy is taking his two-day workshop on behavioural technical analysis to both coasts. The Chart Seminar is scheduled for San Francisco on the 16/17 April and New York on the 23/24 April. Read more below.
Regards, Mark Glowrey - Investors Intelligence (London office)
NYSE BP rebounds
One of the best-known of II's proprietary indicators is the NYSE Bullish Percentage. Here's what Investopedia has to say on this market-timing tool:
And what is it telling us now? Tarquin Coe writes:
The NYSE Bullish % indicator reversed up in the second week of October from just above oversold. The reversal raises the status to “bull alert” which means that investors should be preparing to go long the market. The green light will come on a “bull confirmed” signal which will be printed at 42%, a break above the 31st August high. Subscribers will be advised on the day of the signal via our US Hotlines service.
The indicator is a graphical representation of the percentage of NYSE stocks on P&F buy signals and reflects the internal health of the market. The greater the participation, the more a rally can be trusted.
Advisors Sentiment indicator in favourable position
It is not often that our Advisors Sentiment Indicator becomes deeply oversold, but when it does, investors should take note. The major rallies of the last decade have all started during periods of severely depressed investor sentiment.
Readings (as measured by Bullish Advisors minus Bearish Advisors ) now stand at -12%, equivelent (and slightly below) the readings seen in 2010.
The question now is - will we see a sharp reversal (as 2010) or a more complex bottoming process as recorded over 2008/09? Our analysts will be monitoring this vital indicator over the weeks to come.
Are you a subscriber to the Advisors Sentiment indicator? Get updated weekly by our analysts. More details here: http://www.investorsintelligence.com/x/us_advisors_sentiment.html
Please note - The full dataset back to 1963 is available for financial models, quants, black-box etc. IP restrictions apply.
International Index breadth
We have looked at the NYSE breadth in the section above. II US stock service offers a wide range of sector and index breadth indicators.
However, If you would like to monitor II's full set of breadth indicators for the major international indices, our International Index Module provides both individual index breadth and "breadth of indices". The latter is a tool where we monitor the breadth of index groups (i.e. how many indexes in a region are in uptrends/downtrends. Here's what the European group looks like.
II's International Index service is great value at just $250 a year. Subscribers benefit from:
- Daily Hotline with Chart of the day, analysis and long/short trades etc
- Online Chart Library
- A full set of breadth indicators for the major global indices.
More details here: http://www.investorsintelligence.com/x/international_equity_indices.html
Behavioural Technical Analysis
With 40 years of investment and trading experience, David Fuller of www.fullermoney.com has developed a unique system, which he named Behavioural Technical Analysis. This approach combines theories of crowd psychology with factual charting disciplines, generating a set of investment principles that work in all market conditions. The Chart Seminar encapsulates David's analytical development and considerable investment and trading experience. Since 2008, Eoin Treacy, David's colleague and co-editor of Fullermoney has picked up the baton. Eoin has taught the techniques established by David to investors around the globe. This year saw Eoin take the Chart Seminar on a sell-out tour of London, Singapore and Australia. Nest year, the seminar will be coming to the US.
What will you learn? Eoin reviews candlestick, point & figure and bar chart theory, translating chart patterns into what people are thinking as they buy and sell. The insights give delegates a practical framework for generating profits when technical conditions are favourable and staying out when they are not.
In addition, the sessions are interactive, stimulating and the examples of behavioural psychology often amusing. This is as much to do with the quality and experience of the delegates as Eoin's own wealth of trading and investment experience.Here's what some of the past delegates have to say:
"Thoroughly enjoyed TCS in Sydney. Even after following the service pretty closely for nearly 10 years, I managed to take an enormous amount from the two days. I wish I had attended years ago." T.S., Private
“Excellent and relevant course. Broad spectrum of delegates helped in covering a wide area of interests. Never dull.” N.M., Rabobank
"The Chart Seminar is an absolute prerequisite for any person active in the markets." G. F., Standard Chartered Bank Australia
You can read more about The Chart Seminar at www.fullermoney.com. For further details, or to book, either take a look at the registration form, or contact Sarah Barnes in the London office on +44 207352 5435.
Best regards to all our subscribers from the team in both the London and New York offices. If you have any questions, or need help processing a subscription, please do not hesitate to contact us as follows:
Analysis queries: firstname.lastname@example.org
Subscription queries: email@example.com
Alternatively, call Grace Ann Iomazzo (US office) on (914) 632 0422 or Sarah Barnes ( UK office) +44 20 7352 5435.
We look forward to hearing from you.
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