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A/D
Indicators |
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Indicators based on the "advances" and "declines" concept -
The lowest A/D issues and A/D volume ratios in 2004
In 2004 there were 5 instances where the S&P 500 index reached
critically low A/D issues and A/D volume ratios.
| Table
1. Lowest critical A/D
volume and A/D issues ratios reached in 2004 year.
S&P 500 index.
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The S&P 500 chopped around in a
sideways trading pattern for most of the year. Each time critically low A/D
ratios readings appeared the index generated a mid-term run higher. The only
exception was point B (April 14), after which the index recovered by only 1.5%
over the short-term and then declined to new lows.
Chart #1: Lowest
critical A/D volume and A/D issues ratios. S&P 500 index. (In the
bottom pane, A/D issues ratios are listed at the top and A/D volume
ratios at the bottom).
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| Chart #1 - Point A:
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Between March 8 and March 22, 2004, the S&P 500 index declined by
approximately 4%. After reaching critically low levels for the A/D issues and
volume ratios on March 22, the index started a recovery rally on March 24. |
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| Chart # 1 - Point B:
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The market seemingly ignored this point for an upside reversal
over the mid-term. After reaching critically low sentiment readings on April 13,
the index regained a mere 1.5% in a short-term rally. |
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| Chart # 1 - Point C:
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On May 17, we saw a situation similar to
the one that had occurred on March 22, 2004. Preceding point C was an
index drop of about 4%. The S&P 500 then reached critically low
sentiment readings and subsequently reversed course, starting a recovery
rally the following day. |
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| Chart # 1 - Point D:
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For a third time in 2004, we noted
an index decline of some 4% leading to critically low sentiment readings
- this time on August 5. However, in contrast to previous incidences,
the S&P 500 index showed a stronger recovery pattern - between August
and the end of December, it rallied almost 13% |
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| Chart # 1 - Point E:
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After the S&P 500 index had lost almost
2% in a single day, critically low A/D issues and A/D volume ratios were
reached on December 7. The extremely negative sentiment wasn't created
in the result of prolonged and deep falling, therefore this point could
be as confirmation to the exciting uptrend (started after low sentiment
reading on August 5, 2004), and helped to move the index 3 % higher. |
Next
V. K.
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