Monday, August 18, 2014

Market breadth – a big test coming:



I think the last time I looked at the NYSE advance / decline line was back on December 24th, 2013 when I tabled this description - “The Advance / Decline Line (AD line) is one of the most widely used indicators to measure the breadth of a stock market advance or decline. The AD line tracks the net difference between advancing and declining issues. It is usually compared to a market average where divergence from that average would be an early indication of a possible trend reversal.”

At that time the S&P500 was at all time highs and the NYSE A/D was still not confirming the recent advance - a sign of thinning leadership. Subsequently we got a shallow correction in late January 2014 and in mid February the A/D line broke to new highs and in May the S&P500 followed and broke to new highs. Now here we are - once again - with both the S&P and the A/D line rebounding from a late July swoon and running back up to the early July highs. This will be an important test because we need both to break to new highs in order to continue the 2014 advance.


Tuesday, August 5, 2014

A P&F Breakdown on Valeant (2):



A quick update on health care component - Valeant Pharmaceuticals International, Inc which happens to be listed on both the Toronto and New York stock exchanges. A duel listing is a positive if US investors love you but, not so nice if US investors change their minds – which seems to be underway – right now.

On the prior post TSX listed Valeant  plotted on a point & figure (thanks to Stockcharts.com) – we saw the potential breakdown of support at the $126 range or about $116 in US dollars. I suggested if VRX trades down to $114 (US) the longs should take the money and run. Today – thanks to Stockcharts.com - on a P&F we can see the breakdown in the NYSE listed Valeant – with broken support at $114. The next lower support is now at the $104 level – with the next target being that lower primary trend line.


Thursday, July 31, 2014

A P&F Breakdown on Valeant Pharma:



One of the best charting tools is the Point & Figure – there are several reasons to never ignore a P&F signal - one being unlike the popular MACD, its use is not widespread. What advantage is there in seeing a MACD signal when MILLIONS of traders and investors see the same thing at the same time?

Our chart today is health care component TSX listed Valeant Pharmaceuticals International, Inc. (VRX)  plotted on a point & figure (thanks to Stockcharts.com) – where we can see the potential breakdown of support at the $126 range or about $116 in US dollars. I would suggest if VRX trades down to $114 (US) the longs should take the money and run.