Plimsoll Day - Wednesday, page-2

Capitulation? Tuesday Evening Report. 9 February, 2016.

Today looked like Capitulation Day especially in the Financials, which dominate our market.

Here's the XJO Chart for today:



Today was the worst down day since we saw the ugly days in August/September 2015. Today was down -2.88%, but back in August, 2015 we saw a down day >4%.

But - lets face it - today was the worst day down in six months.

A "capitulation day"? Probably.

Volume was very high at 127% of the 20-Day Average (which has been rising).

AdvancingVolume/DecliningVolume Ratio was 21.5%. Usually a figure under 20% is required for a capitualtion day, but today was close.

Near enough?

Unchanged Issues today was at 291 - under the magical 300 level I've set for a capitulation day. Not that far below 300 - but it does meet the criterion.

Indicators are generally showing positive divergences, so the possibility of a move up in the near future is good.

Let's have a look at the XXJ Chart (Financials X-Property).



Today was down -4.44%. That's the worst result since late August when the XXJ was down -4.92%.

Here's the National Australia Bank (the worst performer in the four big banks):



Today it was down -4.78%, a little worse than the late August 2015 result of -4.65%.

We never know for sure if we've seen a capitulation day until sometime in the future, but this is looking like a good candidate.

Capitulation days don't guarantee a change in the long term trend, but a change in the medium term trend is a likely probability.

RB