Update on NYSE Advance Decline Line

A few posts ago back in May 21, I displayed the daily S&P500 plotted above the NYSE A/D Line where we saw the breakdown of the S&P500 and the NYSE A / D Line which was a significant negative technical event. However equally significant was the major support levels which were just below the prices at Friday May 19, 2012. I concluded it was too late to sell so suggested we change the current mantra from sell-in-May to stay-in-May.

Since then there has been considerable technical improvement in the relationship between the S&P500 and the A/D line. Our chart this week is clearly displaying a juncture or turning point on the S&P500 and the NYSE A / D Line. Note the major support levels which were just at or below the lows of Friday May 19, 2012. Note also the recent A/D line plot – well above the Major Support line. Clearly the A/D line is leading the S&P500 - which for the moment is bullish