|Chart updated on
September 16, 2009
after the close of business.
points to the Barometer-plot as of Wednesday's close. As you can
see the plot continues to move above the boundaries where it has been for most of the time
since March 2009- a bullish sign.
This means the fundamentals of the market are
good and that this rally continues.
A pullback or consolidation period is around
Notice the red
arrows that point to the wide gap between the plot (yellow)
and the boundaries (green and
In these two cases, the gap indicates wide
spread enthusiasm for the stock market and will end either with a
consolidation or a pullback.
As a note: look at the
blue and green arrows. Just ahead
of those arrows are two gaps. In the case of the
blue arrow, it led to the November false bottom. The
green arrow points to the March bottom.
These wide gaps in the negative cases are
indications of capitulation. The wide gaps in the positive are
indications of great enthusiasm. They both lead to a change at
some point in time.
When and how deep will the consolidation or pullback get is the question.
That question cannot be answered but what is answerable is the fact that it
will happen and most likely soon from looks of the chart.
We are about to enter a period of time (late September and October) where
volatility is nearly a daily occurrence.
A one or a two day sell off doesn't mean it has
began and doesn't mean it hasn't. When the Barometer-plot (yellow
line) moves down and crosses the boundaries that could indicate that
it may be underway- it being a major consolidation or a pullback.
Always watch the bug for changes. If and
when the Bias and BLI go positive it will means enthusiasm is getting a bit
other channel chart give you a broader
picture of how this [March 2009]rally compares to the last leg [July 2006]
of the March 2003 rally.
Remember any bad news can derail positive
momentum and turn the market lower. This chart-- for now-- shows that
fundamentals of the market are still good.
This chart is a closer detail look at the Barometer chart from the
This chart is updated daily but published occasionally.
This chart is populated from one of the model metrics on a daily basis.
During positive markets the Barometer-plot
rides and bounces on the back of the green
and it always is atop the red boundary.
During negative markets the Barometer
plot and red boundary are inverted
with the green boundary normally contained in
At times during CAUTION forecasts, the plot and boundaries intermingle.
This particular chart is updated daily
but not published on the website routinely, for security reasons.