S&P 500 - April 2, 2011

At Market Time Premium, we saw the deterioration leading to the Feb peak days ahead of the peak. We correctly identified further deterioration in breadth using our very own OEW and Market Alignment Index (MAI) indicators.

I introduced these indicators here in a post of Feb 20


We were ready and prepared for the peak and its aftermath.


In a premium post of March 18, two days after what now looks like a good low, I examined a number of internal indicators and wrote:

“Notice that net new high has turned positive again. It is hard to think of a falling market when net new highs expands. That is one indicator for bears to push down if they really mean business. If it dips back below zero, it may have ominous implications”


Further on, in a premium post of March 21, I said"

"I think there is a good chance that breadth, as measured by McClellan, has set a bottom."

And

"A market that gaps up and closes up, and registers an internal oversold on short term measures is a market that is more likely to go higher'

Later, in a premium post of March 23, I said:

"March 21 has been followed by two days tight price action and a TRIN that has not dipped below 1 yet. The coiling action that I suspected then looks more apparent now. It can produce a knee-jerk reaction if it breaks loose. Since we have had a rally from March 16 into this coil, probabilities are for it to break to the upside."


Later, in premium post of March 24, I said

"The same contracting MAs that we had discussed as resistance can now be viewed as support. It gives us the same 1290-1300 that we had as resistance as support

Bulls should ideally prevent the index from falling back into the 1290-1300 area. Next order of business for bulls is to either hold or advance so that shorter MAs can cross and become positively aligned. That would give the market a positive technical posture"

All those correct observations and more kept me on the right track leading to Friday's confirmation of an OEW mid-term uptrend this past Friday

At Market Time Premium, we are not about picking tops or bottoms. As long-term reader of this blog know, I have had a good dose of identifying actionable turns, and I still do, I never seek to pick tops or bottoms. I only seek to objectively analyze the market, identify risk, and lay out probabilities

So far, so good, and I intend to keep it as good ;-)


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