Transparent Accounting - Friday, page-5

Morning all,

Pullling the XJO over for a breadth test.....

A few days ago Redbacka mentioned the "odd" candles with extended "shadows" above and below the real body (hehe, I've been reading about candles lately, so I've gone from total ignorance to a-little-knowledge-being-a-dangerous-thing stage - I'm so proud! ).

Anyway, avoiding the delicate issue of trend duration and definition, the candles theory seems to indicate that the trend will stall when these gravestones, dodgies, and hanging men appear during a trend. The candle peeps hedge bets on the issue. "Stall" seems the official status, and "reverse" is noted in retrospect - but that's TA for you. And TBH, the whole run of these candles seems to be a trend in itself, so confirmation of a "stall" seems to be wanting. Doesn't mean it won't happen today.

Pink Ellipses - top pane. Going back to find a historic analogue, a very simillar pattern occurredd this time last year. ..

Blue arrows, mid pane. Stocks at 252 day highs - 252 day lows. Taking the breadth into account, the XJO seems on the same trajectory as last year, though we are lacking the dramatic volatile bottom that occurred last year, so the rise would probably be less dramatic also - perhaps more interrupted? This is a strong historical pattern.

Green Arrows. Bottom pane.Cummulative AD-line. (I calculate this AD line as a "whole of market" AD. This adds an overall negative bias to the line). For the purposes of the breadth test, its another way of analysing how the market is moving at this point in time, and it pretty much confirms the 252 highs/lows plot.

Interesting to note these parallels, and the old market adage must be taken into account as well, history might not repeat itself, but it often rhymes, might just be alliterating at this stage...... have fun.