Wednesday, February 22, 2012

OH OH > I think the Clock just struck Mid-Nite !! Top Break Over?

WE see the fluctuations on the MACD panel at the bottom getting larger, but since it is a co-incident to slighly lagging indicator, we cannot infer any size of the Up-Down move UNTIL it gives us the clue.

HOWEVER, directionally, the MACD has spoken and broken to the downside.  Rather confusing and this is NOT adjusted for Commodity Pricing, so is an absolute indicator that Breadth, and this by implication, Prices on equities will be moving lower. 

Reading this Blog you know the Base measure on this chart, Mr, Nasty, $NASI, shows that the accumulated rolling total of net advances is in fact, now declining.   The purple line is Tri-Continental Corp, one of my favorite closed end funds that serves as an excellent proxy for the rest of the markets, and it's motion relative to MR.NASTY and its 6 day exponential moving average reveal a high and tight direct correlation.  This is a validation check for me.

So IMO, we go down from here, as is typical of a cyclical drain-out of basic Funds-Liquidity.  IMO, the tide will reverse itself in true cyclical fashion down the road a bit.

Good Luck

DG

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