I've revamped the charts. Of notable interest is the third chart down, which graphs the 10-day exponential moving average (EMA) of the $BPSPX divided by the $CPCE. The $BPSPX is a market breadth indicator calculated by dividing the number of stocks in the S&P that are bullish by the total number of traded stocks in the S&P. This produces the percentage of bullish stock positions. When divided by the $CPCE, which is the CBOE put-call ratio for equity stocks, it produces good overall tops and bottoms without being unduly influenced by minor market corrections.
The $NYHL measures the daily ratio between the number of stocks that approach new 52-week highs to the number that reach 52-week lows. The New Highs/Lows Ratio resembles the Advance/Decline Ratio and makes a useful oversold/overbought indicator for the market. Extremely high values sometimes mean that the market is becoming overbought. A sell-off which often follows, in its turn makes prices fall. In the same manner, very low values can mean that the market is becoming oversold. It's usually worth using it as a confirmation for other indicators than just generating entry/exit signals as it demonstrates only on a portion of the activity in the broad market. The $NYHL can warn about false market breakdowns.
Market Commentary:
The FED announced they are going to buy long-term bonds; i.e., they are monetizing our debt, which will accelerate the destruction of the $US. As Jesse's Cafe Blog so aptly described, we are shooting the patient with morphine so they can go back to work without treating the disease. The next phase of this financial credit crisis may be the take down the US Bond and the dollar. That is what is known as a financial heart attack.
In my opinion, anybody interested in buying gold and silver should now give it serious consideration. This could be the precious metal turning point.
I will have some further thoughts before market open tomorrow.
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