A major breadth reversal with a compelling record just triggered
-
Jason Goepfert
Published: 2021-12-10 at 07:30:00 CST
An S&P 500 breadth reversal buy signal for stocks
A new signal from a voting member in Dean's TCTM Composite Thrust Model issued an alert at the close of trading on Wednesday. The component is called the percentage of members above the 10-day reversal model, which identifies when the number of members trading above the 10-day moving average cycles from oversold to overbought in a short period of time.
The number of S&P 500 members above the 10-day moving average increased from 5% to 89% in only 5 sessions. That's the quickest reversal since last October.
This signal triggered 52 other times over the past 93 years. After the others, future returns and win rates were solid across all time frames.
| Stat box Despite a down day in stocks on Thursday, traders plowed more than $4.45 billion into the SPY fund, apparently betting on a rebound in the S&P 500. That was the 5th-largest inflow for the fund in the past year. |
Corn's Santa Claus rally
Jay looked at the annual seasonal trend for corn futures, which is presently entering a favorable seasonal period.
For this test, we will examine the performance of corn futures between an upcoming 14-day stretch. The chart below displays the cumulative hypothetical $ + (-) achieved by holding a long 1-lot position in corn futures ONLY during this period every year starting in 1960.
Over the past 61 years, 54 of them showed a gain during these roughly 3-week stretches with an average gain that was more than double the average loss. 
South Korean stocks have been hit hard
South Korean stocks have been hammered since their summer peak. In U.S. dollar terms, the Kospi dropped more than 18% before a strong rebound in recent days. The combination of rising Covid cases and a tightening central bank hasn't gone over well.
Damage has been widespread, as we can see with the advance/decline figures. On an average day heading into December, 125 more stocks declined than advanced. Only the global financial crisis and the pandemic panic can match this.
Other long-term breadth measures are showing a similar pattern. And there is evidence that U.S. based investors have fled the most popular fund that tracks these stocks.
Related Posts:
- A ray of hope for stocks from high yield bonds
- New lows on the Nasdaq near a 25-year record
- Nasdaq nears record new lows as hedging activity spikes
- Do new lows suggest capitulation
- A jump in stocks cut in half, with Healthcare bearing the brunt
Tagged As:
The post titled A major breadth reversal with a compelling record just triggered was originally published as on SentimenTrader.com on 2021-12-10.
At SentimenTrader.com, our service is not focused on market timing per se, but rather risk management. That may be a distinction without a difference, but it's how we approach the markets. We study signs that suggest it is time to raise or lower market exposure as a function of risk relative to probable reward. It is all about risk-adjusted expectations given existing evidence. Learn more about our service , research, models and indicators.
Follow us on Twitter for up to the minute analysis of market action.
Follow @sentimentraderNot ready to signup up for a free trial yet?
Signup for our Daily Lite email to receive highlights of our daily report, research and studies.
Follow us on Twitter:
Follow @sentimentraderSubscribe to our Youtube Channel:
RSS Feed
Subscribe to the Blog RSS feedTags
Recent Blog Posts
Brought to you by:
>