Thursday, July 20, 2017

266 Days Without A Correction - So What! $SPX

News
266 days without a correction of 5% or more. The most basic definition of the trend, a message that perpetually eludes the majority, the stock market is a buy (or sell) as long as price and volume are aligned up (or down). Consolidation, a mismatch between price and volume, favors a transition from up to down ahead, or vice versa. The probability of this transition increases substantially under compression (+BW), a sharp reduction of relative volatility. The statement that stocks have traded 266 days without a meaningful correction fails to ask the following:(1) are price and volume aligned, and (2) if so, for how long?

The S&P 500 has produced an annualized profit of 15% for 69 days. The average aligned up impulse has produced a 27% return for 60 days since 1950. Today's impulse, for all the shock and awe commentary, is very close to the historical norm. The longest aligned up impulse has been 178 days.

This balanced and objective analysis, however, is likely too boring for mainstream media (MSM). Their goal is rating and clicks, not profits. Chose wisely what you consider to be good information. The assumption that well-dress means 'smart' has cost more trading portfolios more money than all the flash crashes combined.

These trends are monitored weekly in Trading Notes for subscribers.

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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.