I want to discuss stock market bubbles versus new highs and bull runs.
Many of you, I am sure, are concerned about the current market climate. Economies in recession, industries on the brink of disaster, high unemployment, Covid, and a multitude of other issues.
But Mr. Market does not care about your worries; Mr. Market cares about the availability of cheap money, Central Bank stimulus, fiscal policy, and the promise of better times.
We have the promise of better times.
We live in an age where it is actually difficult for a publicly listed company to go bankrupt because it has access to life support and cheap credit.
The question for you “shorties” is…
Are you willing to continue to lose out on profits while the market rises?
Sure, this might end in catastrophe at some point in the future. But that point is not now (probably).
Bullishness With the Avance Decline Ratio Analysis
Take a look at the chart; I have plotted the largest spikes in the Advance/Decline Ratio over the past five years. Do you see a correlation? This is not a lagging indicator like RSI, Moving Averages or MACD.
It tells you now what the market participants are doing. They are either providing demand and pushing prices up, or being a supplier and pushing prices down.
Keep an eye out for large spikes in ADR, as it quite literally predicts a bull run for the subsequent days to months.
An ADR above 3.6 is a strong predictor. This means 3.6 stocks increase in price for every 1 that declines. Of course, the bigger the ADR the stronger the move.
Note: This is a weekly chart.
Finally, remember the stock market would never go up if it did not break into new highs and continue to climb.
Many of you, I am sure, are concerned about the current market climate. Economies in recession, industries on the brink of disaster, high unemployment, Covid, and a multitude of other issues.
But Mr. Market does not care about your worries; Mr. Market cares about the availability of cheap money, Central Bank stimulus, fiscal policy, and the promise of better times.
We have the promise of better times.
We live in an age where it is actually difficult for a publicly listed company to go bankrupt because it has access to life support and cheap credit.
The question for you “shorties” is…
Are you willing to continue to lose out on profits while the market rises?
Sure, this might end in catastrophe at some point in the future. But that point is not now (probably).
Bullishness With the Avance Decline Ratio Analysis
Take a look at the chart; I have plotted the largest spikes in the Advance/Decline Ratio over the past five years. Do you see a correlation? This is not a lagging indicator like RSI, Moving Averages or MACD.
It tells you now what the market participants are doing. They are either providing demand and pushing prices up, or being a supplier and pushing prices down.
Keep an eye out for large spikes in ADR, as it quite literally predicts a bull run for the subsequent days to months.
An ADR above 3.6 is a strong predictor. This means 3.6 stocks increase in price for every 1 that declines. Of course, the bigger the ADR the stronger the move.
Note: This is a weekly chart.
Finally, remember the stock market would never go up if it did not break into new highs and continue to climb.
Barry D. Moore CFTe Financial Technician
12 Proven Winning Chart Patterns
www.liberatedstocktrader.com/chart-patterns-reliable-profitable/
MOSES Beat The Market with TradingView:
www.liberatedstocktrader.com/moses
12 Proven Winning Chart Patterns
www.liberatedstocktrader.com/chart-patterns-reliable-profitable/
MOSES Beat The Market with TradingView:
www.liberatedstocktrader.com/moses