investors intelligence
Generating first rate investment advice since 1947
  Analysis: II Highlight   Archive

This free-to-view area features articles from Investors Intelligence analysts and reports and reviews on II’s analysis published on other websites and publications. 

II Insight 
21 November 2012


Dear Insight readers
Welcome to the November edition of Investor's Intelligence free monthly newsletter.
Unfortunately general market technicals are not in great shape at present, so we are maintaining our bearish outlook from last month's report. In this report we provide a read on the NYSE Bullish %, an indicator we have been using to navigate bull and bear markets since 1955.
We also reprint an interesting quarterly chart of the S&P 500, further evidence that the medium-term is not bright. However, every sell-off creates a buying opportunity, so for the time being it is just a case of keeping cash on the sidelines, being patient and keeping an eye on the technical situation.
We wish all our readers and their families a wonderful Thanksgiving.

Tarquin Coe
Technical Analyst, Investors Intelligence, New York office
Indicator review
Market internals are now breaking down at an accelerating pace. Worryingly, for investors, this deterioration appears to be only just beginning.
On the chart we have plotted the S&P 500 (green) with an overlay of the NYSE Bullish % (blue). This breadth indicator, the percentage of NYSE stocks in bull trends, is one of the best barometers of market health.
Breadth has some way to go before reaching the oversold level of June at 43% and a very long way to crash before the October low of 18% is visited. With the present reading of 53.81% the downside risk is disturbing.
On the chart also note the negative breadth divergence as the S&P 500 set its high for 2012. That implied diminishing participation. Typically when this level of divergence is apparent the market will break beneath the last major low, which in this case is the June low of 1266.74.
The Point and Figure chart for the indicator has also turned down. The last time it rolled over was April 10th. A month following that turn down, the Dow was up 500 points, providing a lucky escape for the more savvy investors. However, from that point the Dow shed 1200 points, down to its June low. Often the market outcome following this signal is delayed so the message is that any strength over the next few weeks should be seen as an opportunity to rotate defensively.
The indicator is updated daily and subscribers have full access to this and many other indicators on our website. A subscription to the US Daily Hotlines, provides daily commentary on the NYSE Bullish % and many other indicators, along with website access.
Countdown to a top?
In the October issue of Insight we showed the potential bearish wedge on the S&P 500, a pattern which looks to be now activating. That month we also highlighted another interesting chart to our subscribers.
A chronological pattern is evident on the quarterly chart for the index. The excerpt below explains the pattern and was taken from the 10th of October Coe Report:
“Following the bear market low of 2009, the index went onto rally for 4 consecutive quarters. The index then paused the next quarter, then rose for 3 consecutive quarters. Paused again, then rose for 2 consecutive quarters. Paused again, and then rose last quarter. It's simple stuff but its message is clear -- a weakening uptrend and a possible countdown to a top.”
This is one of many bearish technical observations we have been highlighting since the highs of the year in mid-September.
A monthly subscription to the Coe Report is available for just $40 a month.

Also available online at Unauthorized forwarding, copying or reproduction of this report will be treated as a breach of copyright. To subscribe, visit the website or contact Investors Intelligence on +1 914 632 0422.
To unsubscribe from this newsletter, please click here and hit 'Send'.
This report has been produced and compiled by Investors Intelligence, a division of Chartcraft Inc, and is provided for information purposes only. Under no circumstances is it to be used or considered as an offer to sell, or a solicitation of any offer to buy. While all reasonable care has been taken to ensure that the information contained herein is not untrue or misleading at the time of publication, we make no representation as to its accuracy or completeness and it should not be relied upon as such. From time to time Chartcraft and any of its officers or employees may, to the extent permitted by law, have a position or otherwise be interested in any transactions, in any investments (including derivatives) directly or indirectly the subject of this report. Also Chartcraft may from time to time perform other services (including acting as adviser or manager) for any company mentioned in this report. The value of securities can go down as well as up, and you may not get back the full amount you originally invested. Derivatives in particular are high risk, high reward investment instruments and an investor may lose some or all of his/her original investment. If you make an investment in securities that are denominated in a currency other than that of US dollars you are warned that changes in rates of foreign exchange may have an adverse effect on the value, price or income of the investment. The investments referred to herein may not be suitable investments for all persons accessing these pages. You should carefully consider whether all or any of these are suitable investments for you and if in any doubt consult an independent adviser. This report is prepared solely for the information of clients of Chartcraft who are expected to make their own investment decisions without reliance on this report. Neither Chartcraft nor any officer of Chartcraft accepts any liability whatsoever for any direct and consequential loss arising from use of this report or its contents

US Sentiment holds the key
The Advisors Sentiment Survey continues to provide advance warning of major market turning points.  
The analysis and data regularly feature in the international financial press as a key indicator of market reversion.
Examples of these articles can be found on Barrons, NY Times, and Investor's Business Daily.
Want to know more?  Click here  - and you can subscribe for just $335 annually.

Historic Advisors’ Sentiment data since 1963 is also available; please contact us for further details.

"This is an exceptional service and should be in every traders toolbox.
Thank you for the great service!" C.C.
Free Research
To receive occasional free research material please follow the links below to sign up.
Existing users: Click here
Others Click here to subscribe now.
Our Services
Investors Intelligence is a leading independent provider of research and technical analysis of stocks, currencies, commodities and financial futures.

Read more, and trial our services below: