Quad 1-2, still thin!
Quad 1-2, but still thin!
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Dollar and 10-y edging up. Key levels here, if the dollar gets a further bid, I will get more cautious. IWM 0.00%↑ is at support.
Advance - Decline Timing: Buy signal!
Works very well on the weekly, daily and hourly. Basically, whenever price is stronger than Advance - Decline (e.g. the relative strength red line from above upper chart is pointing down), it means there is (bigger cap) strength under the hood.
Breadth @ support:
Aboves chart template: https://www.tc2000.com/~Gpmi9n
In bull markets breadth pulls back to 40-30 without too much damage in the indices, that is what happened so far (but it would be the first time since mid-2020, that is what makes this tape so difficult to read).
Have a look at the above chart in 2013, 2017, 2020 (after covid crash) you will see exactly this: pulling back to 40-30 without too much damage to the SPY and QQQ). So, if this is a bull market, breadth needs to turn soon.
My small cap value momentum book still very strong, if it consolidates a bit further this would be perfect (it needs a little more rest ;-)).
To sum it up:
Quads are positive, big cap tech and select mid cap tech leads (not much else leads!), breadth at support, advance decline signal on a buy signal since weeks.
The call for next week: Cautious Quad 1-2.
My implementation of the tape:
I am staying nimble here, about 80 - 85% (reluctantly ;-)) long, I will lift the 20% hedge on IWM at the open (today, Friday 1/19/2024). No time to leverage, for this we are too long in the tooth and the pullback was too shallow.
All right, have a great weekend.
All the best and best regards.
Andreas
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