Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Stocks

Secular Shenanigans

by October 27, 2024
October 27, 2024
Secular Shenanigans

The secular bull market in stocks has been epic both in duration and extent. The NASDAQ 100 Index illustrates this bull run best of all. Using Wyckoff Method classic trendline construction techniques, the chart below illuminates this secular bull phenomena. The stride of the bull market run is set with three points in 2010 and 2011. Drawing a Demand Trendline on the two reaction points and an OverBought (Supply Line) on the intervening high price, the Stride of the advance is defined for the next 14 years (and the bull run is still going strong). The upward trend has ebbed and flowed during the long advance, swinging between the Overbought and OverSold Trendline extremes. And at times throwing over and under these Trendline boundaries. These throwovers typically are long term overbought and oversold conditions. Presently the NASDAQ 100 is above the OverBought threshold of the upward channel, creating the classic Wyckoff throwover. Is this index vulnerable to a reaction back into the channel?  

NASDAQ 100 Index 2008-Present

Extremes in sentiment can be characterized by the classic equity put to call volume ratio. In the lower panel the Put/Call Ratio for CBOE equity option volume is plotted. An extremely low reading for this ratio indicates high call option volume in relation to put option activity. High call activity characterizes broad bullishness by option traders. Conversely, a high reading by this oscillator reflects extreme put volume and reflects intense bearishness. What makes this particular view of the Put/Call indicator noteworthy is the 10 Week Moving Average time frame. The long term construction of this indicator moves slowly and deliberately from Bullish to Bearish extreme and back again. This coincides well with the secular view of the upward striding NDX 100. Note the correlation of the OverBought and OverSold extremes around the edges of the trend channel and how well it syncs up with trading sentiment as defined by the 10 WMA Put/Call ratio.

Two notable conditions on the chart have recently occurred. In the third quarter (July) the NDX­-100 jumped above the Supply Trendline and became classically OverBought. Now, as the fourth quarter gets underway a Test of the July high is underway. Second, during the current Test of the July high the 10 WMA of the Put/Call Ratio has suddenly tumbled down into extreme call volume readings signaling that sentiment has become bullish and frothy, on a longer term 10 week basis!

Sentiment indicators are best evaluated as environmental in nature. Thus signaling that the upward trend of the stock market has suddenly become crowded with bullish speculators and investors. Sentiment indicators tell us when the rewards relative to the risks are high or low. The long term Put/Call Ratio now signals that bullish reward potential is diminished, and the risks are high. 

Wyckoffians would be watching the relationship between the NDX-100 index and the Overbought trendline. Often a decline back into the trend channel from an OverBought condition leads to volatility and a decline toward the Demand Line and an OverSold condition. Note also the position of the 39-week moving average (red dotted line) which is poised at the same level as the upper trend channel line. A drop of the NDX-100 into the channel would breach both of these noteworthy lines. 

All the Best,

Bruce

@rdwyckoff

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. 

Video Appearance:

I recently joined Dale ‘Coach’ Pinkert at ForexAnalytix for this discussion of the present position of the stock market and interest rates. To view it (Click here).

Workshop Announcement:

Mastering Long Term Campaign Investing. Join Roman Bogomazov and Bruce Fraser for this Wyckoff Method workshop for developing skills and mental discipline to successfully campaign long term stock trends. To Learn More (Click Here)

0
FacebookTwitterGoogle +Pinterest
previous post
JD Vance says Trump clashed with former officials for refusing to engage in ‘ridiculous war’
next post
Former National Security Adviser Robert O’Brien: Ukraine’s NATO bid risks ‘World War III’

You may also like

Investors Hesitant Ahead of Fed Meeting: How to...

September 17, 2024

The End is Near!

November 15, 2022

A Debit Spread in American Express to Add...

June 14, 2024

Seasonality Points To Higher Prices NOW

November 24, 2023

Week Ahead: These Factors Stay A Cause Of...

December 4, 2022

Bulls Show Their Might in First Quarter —...

April 7, 2023

Friday Changed the Market’s Character

June 9, 2023

Zillow’s New Strategy Looks Like a Winner; Is...

June 6, 2023

Looking at Recent Market PULLBACK in a Long-Term...

September 27, 2023

Head and Shoulders Top for Semiconductors?

August 14, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Elon Musk may speak to Trump aides in push to calm feud

      June 6, 2025
    • Everyone Talks About Leaving a Better Planet for Our Children: Why Don’t We Leave Better Children for Our Planet?

      June 6, 2025
    • MARK HALPERIN: Democrats try to construct a Frankenstein candidate while JD Vance gains momentum for 2028

      June 6, 2025
    • ‘Gone too far’: GOP lawmakers rally around Trump after Musk raises Epstein allegations

      June 6, 2025
    • Democrats begin to embrace Musk amid Trump spat after party railed against him as a ‘dictator’

      June 6, 2025
    • Trump administration defends US and Israeli sovereignty with new sanctions against four ICC judges

      June 5, 2025

    Categories

    • Business (8,149)
    • Investing (2,011)
    • Politics (15,544)
    • Stocks (3,130)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved