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Some other food for thought.
>From looking at day trading it is pretty reliable to say that when the
Up Vol/Down Vol ratio is greater than 2 it is bullish and less than 1 bearish
and between 2 and 1 there is no clear direction.
If I go back to the charts and look at the total volume of the NYSE and a 50
day moving average we can see that total volume peaked arround the 3rd week in
January. It trended lower until about the 2nd week in April. This corresponds
to the about 1 month prior to the DOWS peak in February and to the DOWS April
bottom.
When I mean trend I am talking about Jim Greens channels.
The total volume on the NYSE breakes it's 50 day moving average and stays below
it for one week beginning the 10th of March. Which coincides with the DOWS
March peak.
Beginning with the first week of March I notice that a 10 day MA of UP/Down Vol
can no longer move higher than a 50 day MA of UP/Down Vol. And about the 3rd
week of April the 10 day moves above the 50 day and stays above briefly. Again
these dates correspond to the DOWS March peak and confirms 1 week later. And
with breakout of the downtrend channel of the DOW in April.
In general a 10 day MA of UP/Down Vol will rise above and then fall below a 50
day MA of UP/Down Vol. The cycles last about 2 weeks.
Finally the NEW High minus New Lows broke below it's 50 day MA first week of
March and climbed above the Last week of April.
SO are these signs present at the moment?
1-Has the total volume of the NYSE peaked and broken the bottom of the uptrend
channel?
Total Volume may of peaked 20 June and fell below the bottom channel July 3rd.
Volume might be falling.
2-Has the total volume on the NYSE fallen below it's 50 day moving average,
staying below it for one week?
It is beginning to show signs that more and more consecutive days are going
below the 50 day MA but not quite a week yet.
3- Does a 10 day MA of UP/Down Vol no longer move higher than a 50 day MA of
UP/Down Vol for a 2 week period of time?
Possible yes. The 50 day MA of UP/Down Vol has been declining since the 1st
week of July. The 10 day MA of UP/Down Vol has failed to move above the 50.
4- Does the NEW High minus New Lows break below it's 50 day MA?
On 18 July the NEW High minus New Lows broke below it's 50 day MA. But will it
shoot back up and stay? It has definitely broken it up trend lower channel.
Conclusion if the erosion in the DOW occurs it could happen as early as
tomorrow and as late as 1 to 1 1/2 months.
How much of a correction? Who knows. But the above would need to be confirmed
with the break down of the current uptrend channel of the DOW which is
currently ridding along the middle of the channel.
Harley Meyer
meyer093@xxxxxxxxxx
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