August 25th, 2009 Update

This contains background information.

For the $SPX:

A, the most sensitive, ticked up again today.

B, which gives early warnings, ticked up today. First time since the other indicators began to show some positive activity on 8/20.

C, which is important in confirming move, ticked up again today.

D, which is important in confirming move and the moves staying power and which had been pointing down, ticked up today. First time since the other indicators showed some positive activity on 8/20.

For $COMPQ:

A: continues to tick up

B: continues to tick up

C: continues to tick up

D: has moved further up and could cross into positive territory tomorrow.

The bottom line is that the signal generator for both these markets continues to strengthen, though neither has confirmed a ‘buy’ signal as of yet. The degree of change today was less than that of Monday, which was less than that of 8/21. Because the move on Friday was so strong, this, by itself, may not mean much. I have been thinking that the signal on the COMPQ, which is the stronger of the two indices right now, might confirm on Wednesday, 8/26, but it doesn’t appear that will happen. I do think that if there is no confirmation by Thursday, 8/27, then the market may be running out of steam and that no confirmation will occur.

The close of today’s session would have to be a cause for concern for the bulls. The TRIN was above 1.xx most of the session indicating stealth distribution. Back in the first part of June, there were several days where the market went sideways and where the TRIN sat just above 1.xx during most of those sessions. After about five such sessions, the market rolled over, finally bottoming on 7/13. I’m not saying this is going to happen but I don’t want to see another day of stealth distribution.