A Strong Advance/Decline Line Means ...

by Geoff Garbacz | 01/04/2017 10:57 PM
A Strong Advance/Decline Line Means ...

Tonight my 6 year old told me that in math class they learned about data. I told him that is what I do each day. Play with data and try to make it turn into information and then knowledge. That is easier said than done.

One of my favorite data series is to track the advance/decline line of the NYSE and NASDAQ each day. Once I have these data points then I add them together. I call this the spread.

Today the spread of the advance/decline line was 3,738. Too many this is just another number. However, it me it speaks levels. Why?

The spread today was the highest number since the Trump Rally began and then some. This is impressive. On the Monday before the election, the spread was 3,623 which was not quite as strong as today. In fact, the last time the spread beat today's number was on July 8th when the spread was 4,259.

Over the next 10 days, the S&P 500 rose five of the next six sessions. I expect the same into next week. Strength begets strength.

Tomorrow we will look at how I track the spread each day to determine when to be invested and when to be in cash.

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