A
clip from the Getting Technical market letter - Interim Update December 4, 2013
GT1417 – page 2 – “A Probable Short Trading Correction”
“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. The upper plot (see chart) is
the S&P500 and the lower plot is the NYSE A/D line. Some worry now as the
A/D Line is just now breaking DOWN below the resistance peaks of May, July and
Sept.”
Summary:
This is a trading call and should be ignored by longer term investors.
Note
the S&P500 close of 1795 on the December 3, 2013 chart and at the close
today the S&P500 was 1782. If that lower trend line is extended through
year-end the downside target is only about 1750. That is not a lot of downside
but just enough to scare Santa away this year.
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