Possible Techmark reversal?


Established member
Encouraged by the use of market breadth data to call a turn in the main market I have applied the same criteria to the techmark. The chart posted below is a bit "busy", but the same principles apply.

I have created an unweighted composite chart made up of all the shares in the main techmark index. That is the top chart. Below it are 6 market breadth indicators that are all pointing to a reversal. In each case the indicator has diverged from the (top) price chart. In particular it is encouraging to see that this potential reversal is confirmed by the Hi/Lo indicator which was not the case in the previous "false dawns" that we have been plagued with.

The main set are the AD indicator, HI/LO indicator and VP Trend. The first 2 are only available on the market timing charts, and signals are generated by divergence between the indicator and the price. Of these, the AD
indicator is the most powerful, the other 2 are part of the supporting cast.

The second set are Up/Down Osc, P-Vol and AD Osc

Sometimes the HI/LO indicator doesn't confirm.
A useful additional confirmation comes from the second set of indicators, Up/Down osc, P-Vol and AD Osc. When the 2 Oscillators cross up thru 0 *AND* P-vol is rising and above its moving average (purple), it is a confirmed buy. Likewise, when the 2 Oscillators cross down thru 0, *AND* P-Vol falls below its MA, then it is a confirmed sell. This second set of indicators tends to set in a little later than the warnings given by the first set, but when both sets are singing off the same hymn sheet, it does seem to be a powerful message.

Anyway, I'm still getting to grips with the use of this set of indicators on a market timing chart of the Techmark constituents so make up your own minds. But there does seem to be more substance behind the current rally. Look at AEA, Anite, ARM, Logica and Pace to name just a few.



  • techmark010801.gif
    55.2 KB · Views: 381
Hi Roger, that's a nice chart. Maybe this means that this is not the end of the world as we know it...

by the way are you still long on Clinton Cards?
The world as i know it ended thirty years ago when i took the vows and wedded my sweetheart :)

If this is not to be another false dawn could the market be trying to pre-empt what was not expected to happen at least not til August was out of the way?

Take care

Steve - I think that markets always pre-empt the accepted anticipated action. For example, everyone reckoned that as soon as the y2k problem was out the way that markets would fly, and that therefore after a lousy summer the smart money would be getting in during Dec 1999 in anticipation. In fact the market started flying from about the 3rd week of October. But I think that you get too besotted with market direction at your peril - always be prepared to change your mind about direction. I am short term bullish but I'm ready to sell if the signs turn bearish again.

Darth - re Clinton cards - no, I was out at 141 when it fell thru support at 148 - but tempted to get back tho'. How about you?