Monday, October 13, 2014

Time to watch the Russell 2000:

Just the repeat once again on market breadth “The Advance / Decline Line (AD line) is one of the most widely used indicators to measure the breadth of a stock market advance or decline. The AD line tracks the net difference between advancing and declining issues. It is usually compared to a market average where divergence from that average would be an early indication of a possible trend reversal.”

They say a picture is worth a thousand words.  

Our latest NYSE advance / decline line displays a break down below the pivot – the early August lows. The problem now is the S&P500 has just confirmed the A/D line break by also breaking below the early August lows

Now the pain is close to the end as the Russell 2000 (the first the break down) currently at about 1049 - is only 50 points above major support as viewed by a point & figure.

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