Those little horizontal bars on the right side of the chart represent Fibonacci numbers which are relied on to indicate retracement levels and resistance, and would seem to indicate a potential rally to 1060 on the S&P 500 and possibly even a rally to 1150. The Twigg's money line measures buying later in the day relative to buying earlier in the day averaged over 21 days. Apparently buying toward the close is a good thing for the bulls, and this indicator looks ready to cross into positive territory (this indicator is the RSI Relative Strength Indicator tweaked a little bit for extreme movement days and gaps).
One basic tenet that any libra can grasp is that prices tend to revert toward a mean. The mean line is the upper diagonal line, and also seems to indicate the market could rally to that 1050 level
Being bearish I welcome a rally. I mean, what the heck, 20 straight days of down 5% and the game's over and we all go home. But, not so fast my friend, look at thst bottom indicator and you see a divergence. Prices are going up, but volume is declining. A divergence forces one to question whether the other indicators are misleading. Could be just the effect of the impending holiday on trading, bur I'm waiting to see further evidence.
Yeah, I know BIG was up another dollar and a half Wednesday, and my bearish inclination keeeps me from taking advantage of rallies. But what's the first rule? Don't lose your money. This is still a secular bear market and I'd prefer to err on the side of caution. My trading guru, Tim Knight says not to impulsively buy and sell, buy with an objective and sell when you reach it. In the meantime move your stop loss sale order price up, to get you out with some profit if the market reverses. Trading in a thin market, though, I rationalize that the price would fall quickly past my stop loss order price and I'd get a fill at a price so low I might have decided not to sell, but hold and hope for a bounce. Kind of a "sour grapes" rationalization, I know. Better for me to take my money and run.
Here'a a copy of an earlier write up on Fibonacci.
Before I get back to discussing the buyers and sellers in the future markets, I should review this Fibonacci number thing. Fibonacci was a Pisan whose father worked as a customs oficial in Algiers. The young man observed that mathematics was a lot easier using Arabic numbers than using Roman numerals. When he returned to Europe he promoted the use of the Arabic system. He was also a mathematical theoritician and in a book published in 1302, one of the problems he posed was a question about how many pairs of rabbits would be bred over a period of time starting with one pair of rabbits. The formula he devised [F(n) = F(n-1) + F(n-2) for n = 3, 4, 5, ..]produced the series of values, "1, 1, 2, 3, 5, 8, 13, 21, 34, 55, ...," The Fibonacci series reportedly has been observed in a lot of natural phenomena so mathemeticians continued to tinker with it. One tinkerer observed that if you divide one number in the series by the previous number in the series you get 1.618034. This becomes observable when you get out to the seventh and eight number of the series, but then this number continues to be the answer for every such calculation. As I said Fibonacci series are found in botany, biology, architecure, and music, so eventually someone tried to apply it to market activity. It appears that .618, its inverse .382, .236 (the difference between .618 and .382), .764, thw additive inverse of ,236 and .500 are levels within the range of a market high and low where retracements occur. I don't believe the Fibonacci "Golden Number" has any occult powers. But the retracement pattern seems to work so I refer to them.
Happy Thanksgiving
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