After few weeks of weakness market is gapping up. as this is range bound market and stocks had pulled back near range low, you can assume the rally might gain try and aim for range high.
We have seen this movie again and again this year. 4 to 5 days of moves that peter out. So current assumption should be same.
In the meanwhile lot of stocks have broken down in recent weeks and the leadership is very narrow. But that has not stopped this market from making these range bound moves.
If you see huge breadth day of 700 plus then that might indicate probable start of longer duration swing.
Overall the breadth is showing divergence. The following breadth chart shows it clearly:
3 comments:
Hi, interesting this post. Basically what you said (if I understood well) is that market could continue to drop for a while, but when breath reaches 700 level it could mark a bottom in the index.
I'd have a curiosity: how did break act in 2007/08? When a bear market start, how much can it fall?
Bye
Toscano
No. If we get 700 plus breadth day to upside then the bullish swing will last for sometime.
In 2007 and 2008 the breadth was negative for extended period of time.
ah ok, I misunderstood. Now It's clearer to me.
thank you very much
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