A Tired, Tired Levitation ~ The Risk Averse Alert

Wednesday, December 22, 2010

A Tired, Tired Levitation

Underlying technical conditions similar to those prior to 2008's autumn blowup presently can be seen via a view of the NYSE Advance-Decline differential contrasting its 10-day moving average with its 200-day...


The lower depths to which the 10-day moving average fell in May 2010 confirming the NYSE Composite's coincident, lower low in relation to February 2010 (as well as late-October 2009) presents the starting point from which the market's subsequent bounce amidst a persistently weakening underlying participation (as evidenced, again, by a fading 10-day moving average simultaneous with a fading 200-day moving average) is seen suggesting that, trouble could be looming.

However one positive presently versus 2008 is the simple fact that, the 200-day moving average of the NYSE daily advance-decline differential is above 0. Back in 2008 the 200-day was negative.

Still, the NYSE Composite presently trades at its high of the past year, while the advance-decline differential's 200-day moving average is nearer the lower end of its range over the same interval. Thus, weakness is seen building and the market vulnerable to a rush for the exits...

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