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Point & Go Figure: Crude Oil, German DAX, Russell 2000




Market Overview:
On Wednesday we note that "the NYSE Percent Above 50-day Moving Average Indicator remains in Xs, but as the line chart shows it has curled down, an indication that a move lower for stocks may be coming." We certainly got the move lower, and now the PnF chart for the indicator has reversed to Os, following the line chart. It has also given an outright sell signal on this reversal down, exceeding a previous bottom.

As well, the Nasdaq Percent Above 50-day Moving Average Indicator is back to negative and has broken down from the triangle formation we pointed out back in early May. Triangle breaks are important formations and frequently usher in violent moves lower.

The High-Low Indices for the NYSE and Nasdaq continue to hold in Xs.

The longer-term bullish percents for the NYSE and Nasdaq Composite are both still in Xs, but the larger pattern of lower highs also remains intact, a significant long-term bearish divergence.

The more narrow S&P 500 and Nasdaq-100 Bullish Percents both are negative, each in a column of Os.

Charts of Interest:
Crude Oil, Continuous
(Chart courtesy
Dorsey Wright)
Crude oil has formed a lower high and today reversed down. A move below 70 would be a very serious breakdown following the lower high.

Crude Oil, Continuous
(Chart courtesy Thomson Financial)

German DAX
(Chart courtesy Thomson Financial)
The DAX has registered multiple DeMark sell signals. Note the most recent sell signal from last Friday saw a brief rise to the red line "Risk Level" before coming unglued. As a trading strategy, one might look to put a sell order in once a DeMark sell signal has registered, setting the entry higher, above the actual signal level, and just below the "Risk Level" in order to get a better entry point. I prefer that to pressing things that are already down. The same goes for buy orders, entering them below the actual buy signal level. Selling strength, buying weakness affords a higher margin for error.

Russell 2000 (RUT)
(Chart courtesy Dorsey Wright)
The RUT is on a sell signal and has now violated the PnF trendline from the October lows.

Position in RUT equivalents

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