Each week in my Technical Market Outlook post I show a daily chart of the NYSE Advance-Decline Line. I think this is a great tool for ‘monitoring’ the health of the equity market, but it can be used on multiple time frames. This is the topic of my TraderPlanet post for this week. I show how we can use the A-D Line and the Relative Strength Index to find potential turning points in the market on short-term 30-minute chart.
Here’s a piece:
Most recently we saw price begin to find some support near the 1816 area [for the S&P 500 ($SPX)]. Each of the three tests were accompanied by higher lows in the RSI indicator as well as higher lows in the Advance-Decline Line. This told us that momentum was rising and more stocks were advance vs. declining as the price action began to form a short-term bottom. Over the next couple of days we saw the S&P 500 rise over 50 points.
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