We have been tracking the Chaikin bull-bear powerbar ratio every trading day since January 2014. Showing the range of SPY power bar differentials is one more way to know when we're near a market low and when we're overextended. With a ratio of .27 in Market Conditions prior to the start of today's trading, the SPY may be a candidate for basing over the coming days and weeks. When the Bull Bear ratio gets near .20, we generally see a mean reversion (though often a subsequent retest of lows). This gives us a chance to nibble at Very Bullish stocks in strong sectors and industry groups showing signs of accumulation. With the amount of technical damage done to stocks, we may wish to consider stocks with Neutral + ratings showing signs of accumulation (money flow and relative strength). Today's trading video is here.
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