weekend thread, page-7

The horizontal line on that chart illustrates that, for the past couple of years at least, things always get "interesting" when $NYSI approaches the 400 level. (The vertical scale for $NYSI is on the right, the scale for $SPX is on the left.) Notice the behavior of $SPX whenever $NYSI moves above or below the 400 line - strong, long-term trends usually occur. Granted, the signal usually happens well after the start of the trend, but that's always the tradeoff - early entry versus whipsaws. If whipsaws aren't your cup of tea, the $NYSI at 400 signal should do well for you.

It also lends perspective to the current market rise. With $NYSI currently at -215, it is too early to declare the return of a bull market. That said, if the Summation Index continues to rise and breaks through 400 then greater optimism is definitely warranted.



thanks to stock charts blog