Doing Lines on the NYSE ~ The Risk Averse Alert

Friday, February 10, 2012

Doing Lines on the NYSE

Maybe it is no coincidence today's relatively sharp turn lower finds one of the broadest measures of equity bank — the NYSE Composite Index — bumping up against a well-established line of support/resistance whose immediate presence, given the index's technically stretched state at the moment, raises prospect a decided turn lower is at hand...


Letting this line of support/resistance speak for itself while those many other matters of bearish underlying technical circumstance add to its significance, the trip upcoming likely will destroy support off which the market bounced early-October 2011. Of course, some coinciding, systemically threatening convulsion or orchestrated swindle can be duly anticipated, as there are an abundance of qualified vulnerabilities existing at present.

Sometime subsequently, and as consistently has been demonstrated over the past few years (and, indeed, over the entire decade preceding), the next tranche of hyperinflationary happiness likely will be served up. So, October 2011 support soon to become resistance might be retested in like fashion as is presently occurring at a higher NYSE Composite index level.

Such is how completion of an Elliott corrective wave forming since March '09 bottom might proceed. This corrective wave is unfolding in standard, a-b-c form. Despite on several occasions over the past two years having appeared prospectively completed, this corrective wave's formation apparently is continuing. Yet its better days likely have passed. In completing the "b" wave of its correction off March '09 bottom the market could be imminently gassed, bringing major indexes to retest March '09 lows sooner than most dopes imagine.

$NYAD 10-day v 200-day

Yes sir, in a word the 10-day moving average of the NYSE Advance-Decline Differential — its fade long-established, too, as but further testified by the measure's 200-day moving average — today went "crack!" In keeping with what was suggested last week, it appears the corner around which nasty lives might have been turned today.

Fast Money
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