Hello TTT’ers,
I know you must be sick of me by now this weekend, but I want to share one more item with you. No math I promise.
I have started planning for the week and am trying to digest this powerful move off of Tom’s TTT buy signal.
Here is a couple of more daily reference charts of where we sit now from 3/18 bottom.
The Dow is sitting just 170 points away now from new post crash highs. It rallied since the TTT Buy signal and entered back into the top of that old 11 day sideways channel. Should it break out from there we would expect a test at the 12391 area and become bullish.
This is the same time frame for the SP500. It too had a nice rally into its consolidation area, but only sits in the middle of the zone. A break below 1300 and we return to a bearish mood and expect a retest down to the 1280 area at least.
I would be full on bullish here except there is one key element missing, and for that we turn to the Zweig Breadth Thrust Reversal (ZBTR) and Zweig Up/Down Volume. If you don’t know what these are google them, they are awesome breadth indicators that help to get an “under the hood” look at market internals. Plus we talk about them in the room everyday.
The White line is our ZBTR signal. This signal when it goes from oversold (that red highlighted day) to overbought in a 10 day period is called a Zweig Breadth Thrust Reversal. It is a rare firing. It has not happened since the March 09 lows. If it does fire, it has a near 100% success rate as a 12 month marker for a new bull market. We are very close, and an upward thrust over the next two days should confirm that.
What has me in doubt is the lower orange indicator, our NYSE up/down volume percentage that has not moved above its oversold line indicating a 90% up volume day also known as a 9:1 volume day. This should have fired at least once by now off that bottom 8 trading days ago. It is missing.
I can not find an example of a rally restoration without a confirming 90% up volume day. Some of my breadth colleagues have moved to the lighter SP500 index (I still use the antiquated NYSE index .. I won’t go into the reasoning now) so I checked with the SP500 up down volume. It has not fired a 90% up volume day either! Very unusual. My reading into that is that there is a fair amount of selling going on as we rally back up to the market highs.
Here is the same chart using SP500 advancing/declining issues and up/down volume.
Until I get some confirmation, I remain suspicious of this seven day rally.
I will keep posting daily updates in our morning digest, I just wanted to share this with you now as it was on my screens.
If you have any questions let me know.
-Red aka (Marlin)
