Wow. I played hookey yesterday for a family birthday party. I thought I would be alright and that the day would be uneventful. The morning of FOMC are almost always flat and the post announcement has activity, but what were they going to say that they did not already say? For the nimble it was a great trading day.
Our NYSE NH indicator did set a two day high, but for the activity and price action it is disconcerting how low it still is. The Russell was a leader yesterday but it too only set a two day high.
Today with the large gap opening that is developing the day should be a follow through day and perhaps a stair step higher NH. Our targer number (Magic number) to turn that 5day upward is around 120.
Our opening 30 minute prediction model broke down big time yesterday. We only had 11 new highs at the open showing great weakness. According to our 40-60% rule our final close on NHs with only 11 opening new high would have been between 18 and 27. We closed over 2x that.
You can see from the intraday momentum indicator at the bottom of this picture that momentum increased throughout the day. That top indicator that turns from green to red to green is the %above/below the 3 day average we are tracking. The color of the indicator turns green if we are sloping up (gaining momentum) or red if we are sloping down.
The curve profile in the past have a very parabolic shape, over the last two days the shape of the NH curve has taken on an “S” shape profile with strong morning and closes and weak afternoons. Something to note.
We will look today at breaking 5 days straight of lower 30 minute opening NHs. We have experienced a turn from the top so now we are charting what a re-direction in momentum looks like.
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