Tuesday, April 27, 2010

The Worm Turns

Bit of a turnaround today as global debt worries appear to have sparked a selling spree. Things looked like they were going to perk up around 12:45 as the VIX started to fade, but those who have been trained to keep a close eye on the NYAD noted only a modest revival in that index, thereby warning risk adverse old guys like myself to stand back for some bullish confirmations.
Those confirmations never materialized, and the NYAD only managed a meager rise to .30 before collapsing back down to .19 at the close. Market swoon reversals are often characterized with selling pressure that reaches a maximum negative momentum at NYAD values of .10-.12 . . a level not even approached today, suggesting more of the same to come.
Below a quick snapshot of the day's carnage with the VIX's over the top 30% pop highlighted. Typically, reversals off these sharp VIX spikes are seen the day of the spike and are reflected in the bar's top tail. In today's case the VIX closed virtually at the high of the day . . a further hint of more selling to come.

4 comments:

Daniel said...

Again, BZB, very helpful recap, breakdown, and analysis.

Based on your other mentions of its use, as a confirming indicator, about a month ago I added the NYAD as a numeric to my multi-datapoint screen (out of only about a dozen or so that stream and update).

It seems to be a bit slower and more definitive than some other indicators of short-term trending; hence a good diversifier. Some of the others can be more finicky and hair-trigger.

We appreciate these quick useful recaps on realtime decision making.

Daniel

bzbtrader said...

Daniel,
Glad to see you've adopted the NYAD. Depending on your platform, watching the NYAD in multiple time frames can be a real asset for picking the turns. I couldn't (or wouldn't) trade without it. When the markets really get itchy, I frequently monitor it on 1,2 and 5 minute bars simultaneously, which helps clarify the signal.

Daniel said...

BZB-

Are you aware of a symbol that gets one a quote, from general sources, for OTHER A/Ds that some use-- like an SP 500 Only adv/dec, or an Equity-Only adv/dec..? The NYSE has so many odd non-stock things in it.

I see charts like the above at sites like Decision Point; but if I input any other symbol than $NYAD, I don't get data.

I live happily in a simple plain-vanilla basic Stockcharts type universe; or a simple Schwab-brokerage data feed universe, and most things I use are available there.

I've done mildly thorough Symbol Lookup searches, and they have not yielded any answers.

Know a way around this, sir? Would appreciate any tips. Thanks.

Daniel

bzbtrader said...

Daniel,
That's an intersting question, but I'm not aware of any such A/D indices. Next week I'll post the open setup for the NYAD proxy in freestockcharts.com. You can apply the template to any stock or ETF. Its the backbone of my Prognosticator indicators now located at the BZB Solutions site.