The Market Indicators thread

[motorway]

I think the b% is a very powerful tool

it is very sensitive
But also does not give false signals

This is because of how adaptive P&F methodology is
To what is always happening NOW

over 70% on the 2%B% and you are well and truly on risk alert

Then keep a look out for falling momentum


Any stocks or sectors that start to roll over and form tops


looking at the USA data that goes back a long way..
If Interest rates are rising too or there is a money problem
Then that is 1929 1987 etc dynamics

P&F charts become volatile
They show churning and make no headway etc

Look at the divergence between the B% and the index.

The bullish % was saying .. "now get out of this ,and then this ,and this

eg it would have urged you out out of CNP approx may 07

The market can not keep going up
IF the foundations ( the individual stocks ) start to falter


Nor can it keep going down
once it hits bed rock

At the top no one has money
it's all in and more ( leverage )
At the bottom money is a problem too

We do seem to be in a time were the cycles are quicker...
It is always the "next 6 mths" that matters

The B% is often referred to as a leading indicator

SMART MONEY
has to buy or sell FIRST

out of or into something

in order to make a future profit

The timeliness and the sensitivity
of the B% picks up these flows

eg look at the divergence

motorway


PS Nov Dec the index made a new high
The B% did not
the Index then made a lower high ( a Last Point of Supply )
But the B% was falling and below 50%
Already in a Bear confirmed mode

 

[josjes]

Motorway

Thank you again for your posts so far. I am getting hooked on this market indicator B%. I have started to subscribe the DorseyWright website (trial only first), and notice that according to Bullish%, the Bank, Real Estate and Retail sectors in the US market have all given out Bull Confirmed signal (Finance Bull Alert). Can you give a quick run-down on these scetors in our ASX if they are in Bull Confirmed status ? I notice from the list of stocks above that are giving out B% of 2%,1%,0.5%, 5 Banks and few of infrastructure stocks are all in there.

Once a stock has all the 3 B% , how likely is it that it changes its status in a short term, i.e. how likely is it to go down south in a few weeks/months (short) term, and break its year low/support again. in other words what is the risk and reward if we take long position at this point.
Thanks.

 

[motorway]

Here is the XFK

The S&P 300 Financials

It is made up of 65 stocks

Here is the result of the 2% 1% .5% scan

Those that score a 3 are bullish at all three filters

there are only 15 of them

( important it means on a down day these stocks were stronger)

Code Name Long Name Score
ABP ABACUS PROPERTY GRP. UNITS/ORD STAPLED 3
ALZ AUSTRALAND PROPERTY STAPLED SECURITY 3
AMP AMP LIMITED ORDINARY 3
ANZ ANZ BANKING GRP LTD ORDINARY 3
BBC BABCOCK & BROWN COMM ORD/UNIT STAPLED SEC 3
BOQ BANK OF QUEENSLAND. ORDINARY 3
CFX CFS RETAIL PROPERTY UNITS 3
CGF CHALLENGER F.S.G.LTD ORDINARY 3
CPA COMMONWEALTH PROP ORDINARY UNITS 3
GMG GOODMAN GROUP STAPLED SECURITIES 3

GPT GPT GROUP STAPLED SEC. 3
NAB NATIONAL AUST. BANK ORDINARY 3
QBE QBE INSURANCE GROUP ORDINARY 3
RRT RECORD REALTY ORDINARY UNITS 3
SGB ST GEORGE BANK ORDINARY 3

---------------------------------------------------------------------
ASX ASX LIMITED ORDINARY 2
BEN BENDIGO BANK LIMITED ORDINARY 2
BWP BUNNINGS WAREHOUSE ORDINARY UNITS 2
CHC CHARTER HALL GROUP STAPLED SECURITIES 2
HGI HENDERSON GROUP PLC CHESS DEPOSITARY INT 2

IAG INSURANCE AUSTRALIA ORDINARY 2
IFL IOOF HOLDINGS LTD ORDINARY 2
IIF ING INDUSTRIAL FUND UNITS 2
LLC LEND LEASE CORP. ORDINARY 2
MCW MACQUARIE COUNTRYWID UNITS 2
MQG MACQUARIE GROUP LTD ORDINARY 2
WDC WESTFIELD GROUP ORD/UNIT STAPLED SEC 2

------------------------------------------------------
AXA AXA ASIA PACIFIC ORDINARY 1
MGR MIRVAC GROUP STAPLED SECURITIES 1
PPT PERPETUAL LIMITED ORDINARY 1

The B% speaks for itself

look at the change in behavior

motorway

 

[motorway]

Once a stock has all the 3 B% , how likely is it that it changes its status in a short term, i.e. how likely is it to go down south in a few weeks/months (short) term, and break its year low/support again. in other words what is the risk and reward if we take long position at this point.
Thanks.

Here is BOQ

I have overlaid a 3 column Exponential Moving average

It is Just a signal line The blue and red arrows show how often

Signals change ( not often )

This is the First "bullish" signal since the top

note the absence of many signals

Do you have a knowledge of P&F ?

I could suggest some books

P&F charts because they are non linear
do not produce much in the way of whipsaws

They simply tend to stop moving..

As well as bullish or bearish
there are the trend lines
and relative strength considerations

and ( If you want ) coordinating with bar charts
There are also price objectives

( P&F is very versatile , very powerful imo

Look how good the signals are ! )



motorway

 

[motorway]

Also note the movement becoming horizontal at the top

( Horizontal is not TIME it is RISK )

I mentioned this loss of momentum when the B% is also at high risk levels

It is what Wyckoff means by a "CAUSE" that will have an effect..

P&F was used by the tulip traders in Holland

maybe by Cain and Abel

Yet it is so cutting edge

motorway

 

[motorway]

Also note how the movement also becomes horizontal at a bottom

horizontal = Risk --->To what has been prevailing

Hence it is important to define the trend and the position in the trend

B% is a valuable tool to identify aspects of this position


Since horizontal is risk to what has been
it also represents the building of a cause for what will be

Horizontal
has to be

(re) Accumulation
or
(re) Distribution

once you define the trend and the position in the trend
you have an answer

(Of course there is always more to it than that )


Important point
horizontal on a P&F chart is not Time

It is always something else (unless it is nothing---Stocks like the banks at a 2% filter very unlikely )

motorway

 

[josjes]

ok, I kind of understand this 'horizontal' meaning. It is saying that when B% is > 70% horizontal means that watch out below we are topping out, take your profit.
When B% is < 30% and the horizontal at the bottom, means that we have a strong support here, further downside risk is minimal, grab your position.

But this:
It is always something else (unless it is nothing---Stocks like the banks at a 2% filter very unlikely ) -=> please translate, particularly 2% filter very unlikely ??

 

[motorway]

ok, I kind of understand this 'horizontal' meaning. It is saying that when B% is > 70% horizontal means that watch out below we are topping out, take your profit.
When B% is < 30% and the horizontal at the bottom, means that we have a strong support here, further downside risk is minimal, grab your position.

The B% could be over 70% and fall back to low risk levels
While the stocks themselves hold their gains and move sideways
for an extended period

Resting and consolidating ....The RISKS have to evaporate through

a process of reaccumulation

sideways is aways new dynamics...Always the other side turning up...

But this:
It is always something else (unless it is nothing---Stocks like the banks at a 2% filter very unlikely ) -=> please translate, particularly 2% filter very unlikely ??

A bar chart could move sideways just because day follows night.

The P&F chart can only move sideways if there is "work" ( acc-dis )

But if the filter is too sensitive then sideways could be just noise across the buy sell spread or could just be background volatility

eg think of a penny stock churning ( so an 8% filter might be needed )

Banks could be traded on 1% and even .5% ( even less for day traders )
So sideways on a 2% filter ( And these are 3 box reversal charts)
is not just the noise of the buy sell spread or just the background volatility

It is significant change in behavior

I kind of understand

I think you are starting to

motorway

 

[josjes]

Yep, starting to grab this concept now, thanks MW for your patience.
Can you do P&F chart and B% for one stock that I own, which has been puzzling me greatly and caused quite pain. It has been on sideway move for the last 2-3 years then in February it appeared to break through this stubborn resistance line on weekly close, but turned down again savagely to close at year low. What's the P&F chart trying to tell that we don't know ?

 

[motorway]

Is it RIC ?


Computer and data problems tonight
so a bit of fixing before any more charts



motorway

 

[josjes]

Is it RIC ?


Computer and data problems tonight
so a bit of fixing before any more charts



motorway

Sorry, yes it's RIC.

 

[chops_a_must]

Here is BOQ

I have overlaid a 3 column Exponential Moving average

It is Just a signal line The blue and red arrows show how often

Signals change ( not often )

This is the First "bullish" signal since the top

note the absence of many signals

Do you have a knowledge of P&F ?

I could suggest some books

P&F charts because they are non linear
do not produce much in the way of whipsaws

They simply tend to stop moving..

As well as bullish or bearish
there are the trend lines
and relative strength considerations

and ( If you want ) coordinating with bar charts
There are also price objectives

( P&F is very versatile , very powerful imo

Look how good the signals are ! )



motorway

Interesting how you can sometimes get the same conclusion, with different analysis.

Didn't see this until just then.

I noticed AMP was especially dangerous to the upside as well, and closed the short on that. Still think that has some potential.

All very interesting...

 

[motorway]

The negative sentiment measured has been DIRE

it is all DOOM... The most negative in maybe two decades at least.

However

The 2%B% is close to making a very significant reversal formation

( could come next week maybe Tuesday )
That would maybe signal the end of winter and the beginning of spring..

ie A very immature and infantile Bull.... So you don't want to buy a sickly or weak stock.... But one ready to go up ( Spring can be still dangerous )

There is continuous ROTATION.... With some stocks always getting ready to lead .

OK three "low pole" reversals on a stock chart

would be very significant...esp with the higher bottom..

( the DOW in 2003 made a powerful reversal off this pattern )

I have used the metaphor of the seasons ,, I think it is useful

Now where is Spring ? We do not want to be mechanical but if this moves up to 50%.... That would be a lot warmer...
And it can do that in a proverbial wink

Seasons are cyclical...

another way of saying--->

One of the few flat statements you can make about the stock market is that any price trend will eventually be carried to excess. John W. Schulz ( A P&F practitioner )

 

[josjes]

OK three "low pole" reversals on a stock chart

would be very significant...esp with the higher bottom..

( the DOW in 2003 made a powerful reversal off this pattern )

I have used the metaphor of the seasons ,, I think it is useful

Now where is Spring ? We do not want to be mechanical but if this moves up to 50%.... That would be a lot warmer...
And it can do that in a proverbial wink

Seasons are cyclical...

another way of saying--->

Aha... so we had THE double bottom then ?? And the widely held theory of hitting 4700 in May - June has a remote chance of materialising ???

 

[motorway]

Aha... so we had THE double bottom then ?? And the widely held theory of hitting 4700 in May - June has a remote chance of materialising ???

That is a strong "bottoming pattern"

But it could produce a fourth pole below 30

( I would not favor that ) at 6.6% it was the end of the world

I think that dire sentiment would be unlikely to return

There are a lot of stocks turning UP

Here is an XAO chart it is now possible to draw some upside objectives

look to the near one first

IF That come easy it "proves" the accumulation in the pattern..

( Those stair steps )

A very old P&F pattern ( law of secondary bottoms )
is a bottom forming either side of the 45 trend line drawn from a top

only discussion

motorway

PS
This chart is an update from one posted in the XAO thread after the first "bottom" had been made

 

[motorway]

There are those who think they are studying the market, when all they are doing is studying what someone has said about the market...
Not what the market has said about itself..

Study your charts not with an eye to comparing the shapes of the formations. Rather study your charts or tape from the viewpoint of the behavior of the stock, the motives of those who are dominate in it, and the successes and failures of the buyers and sellers as they struggle for mastery on every move.

Not what Others are saying about markets, but what markets are saying about Others
Richard D. Wyckoff

The 2% bullish percent continues to move higher reaching 40% on the 27th

and signaling ( in ChartCraft terms ) Bull Confirmed

It is currently at 41.5% with 202 stocks now having bullish charts ( 2% x 3 )

The B% is a chart of technical positions...

Of what is being done... Not what is being said...

P&F dissolves the patterns of appearance
into patterns of character



It is what demand and supply are actually doing that matters...

price moving down builds the cause that will take prices up.

Support and Resistance are dynamic...


50% is still an important milestone


motorway

 

[motorway]

The 2 percent B% is now at 49.8%...

The blue numerals 1,2 & 3

line up the lows ( the three poles ) of the B%

with the relevant action on the XAO chart.

Significant change in the technical position..

IMO The lateral move between 2 & 3 with two spike rejections
has almost been negated as meaningful zone of "distribution"

Yes it looks a ceiling . But that is only because of the delayed ending..
Look at the tight pattern of accumulation at 3

What looks like a ceiling is ( imo ) a floor ( at a higher level hence , a delayed ending )..........

With the B% back at nearly 50% the market is in a very good position to continue to rally.. ( More stocks are above Support and above at least some zones of accumulation...)

A little mention of the moving average ... On a P&F chart they are not averages of time.

There has been only two crosses since 2003... One in 2003 and one in 2008.

On a 1 box reversal charts I am using them to ( see if they )help define meaningful thrusts and change of behavior.


For discussion
motorway

With eg Opes Prime ( as a known example ) is it any wonder that ending actions have been delayed and extended..

 

[motorway]

50% is still an important milestone

Was an important milestone

motorway

 

[motorway]

update

 

[josjes]

Here is the XFK

The S&P 300 Financials

It is made up of 65 stocks

Here is the result of the 2% 1% .5% scan

Those that score a 3 are bullish at all three filters

there are only 15 of them

( important it means on a down day these stocks were stronger)




The B% speaks for itself

look at the change in behavior

motorway

Motorway

Could you give us an update on how's the financial doing now. I am a bit worried given the damages done in the past few days on the banks. Any worrying sign there ?
Are the list above of the 15 stocks on 2% 1% .5% scan still valid ? If not, would you mind running them again ? Many Thanks.