Watchlist this thread: https://usethinkscript.com/threads/discuss-the-daily-trading-climate.21460/
Today's post:
What is going to happen tomorrow?
$ADD might have some clues:
The $ADD ticker tracks the NYSE Advance-Decline line, which measures daily market breadth by subtracting declining stocks from advancing ones. When this reading pushes above +1500, it often serves as a cautionary signal that sentiment may be running too hot.
Historically, sharp spikes in $ADD are most common during the market’s strongest months—April, July, and November. In those periods, even back-to-back surges can occur. Outside these seasonal peaks, however, a daily $ADD reading above +1500 has frequently been followed by a weaker open the next session.
While this tendency can resemble a self-fulfilling pattern, it’s important to remember that past behavior does not guarantee future results. Still, today’s move above +1500 adds a layer of caution for tomorrow’s open. Any premarket positions should be approached with measured risk and careful trade management.
The previous occurrence happened on September 5th.
The day after the $ADD (Advance-Decline line) surged above +1500, the market opened with a sharp decline. Support was eventually established in the final hour of trading, allowing for a rebound. However, it took two additional sessions of consolidation and a gradual decline in $ADD before the broader market was able to resume its upward trajectory.
When $ADD spikes above +1500, it reflects that the majority of NYSE stocks are advancing. While this may appear bullish, it often serves as a cautionary signal. With nearly all stocks already participating in the rally, the pool of potential new buyers becomes limited. This imbalance can lead to short-term exhaustion, increasing the likelihood of a pullback before the market regains momentum.
Coming soon: the indicators on this chart are going to be the subject of discussion here:
https://usethinkscript.com/threads/support-resistance-your-trade’s-make-or-break.20534/
For Updates on important Market Happenings |
Today's post:
What is going to happen tomorrow?
$ADD might have some clues:
The $ADD ticker tracks the NYSE Advance-Decline line, which measures daily market breadth by subtracting declining stocks from advancing ones. When this reading pushes above +1500, it often serves as a cautionary signal that sentiment may be running too hot.
Historically, sharp spikes in $ADD are most common during the market’s strongest months—April, July, and November. In those periods, even back-to-back surges can occur. Outside these seasonal peaks, however, a daily $ADD reading above +1500 has frequently been followed by a weaker open the next session.
While this tendency can resemble a self-fulfilling pattern, it’s important to remember that past behavior does not guarantee future results. Still, today’s move above +1500 adds a layer of caution for tomorrow’s open. Any premarket positions should be approached with measured risk and careful trade management.
The previous occurrence happened on September 5th.
The day after the $ADD (Advance-Decline line) surged above +1500, the market opened with a sharp decline. Support was eventually established in the final hour of trading, allowing for a rebound. However, it took two additional sessions of consolidation and a gradual decline in $ADD before the broader market was able to resume its upward trajectory.
When $ADD spikes above +1500, it reflects that the majority of NYSE stocks are advancing. While this may appear bullish, it often serves as a cautionary signal. With nearly all stocks already participating in the rally, the pool of potential new buyers becomes limited. This imbalance can lead to short-term exhaustion, increasing the likelihood of a pullback before the market regains momentum.
Coming soon: the indicators on this chart are going to be the subject of discussion here:
https://usethinkscript.com/threads/support-resistance-your-trade’s-make-or-break.20534/
