Using Veritas to Construct the "Per…

29-04-2017 Hits:82209 BoomBustBlog Reggie Middleton

Using Veritas to Construct the "Perfect" Digital Investment Portfolio" & How to Value "Hard to Value" tokens, Pt 1

The golden grail of investing is to find that investable asset that provides the greatest reward with the least risk. Alas, despite how commonsensical that precept seems to be, many...

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The Veritas 2017 Token Offering Summary …

15-04-2017 Hits:77819 BoomBustBlog Reggie Middleton

The Veritas 2017 Token Offering Summary Available For Download and Sharing

The Veritas Offering Summary is now available for download, which packs all the information about Veritas in a single page. A step by step guide to purchasing Veritas can be downloaded here.

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What Happens When the Fund Fee Fight Hit…

10-04-2017 Hits:77393 BoomBustBlog Reggie Middleton

What Happens When the Fund Fee Fight Hits the Blockchain

A hedge fund recently made news by securitizing its LP units as Ethereum-based tokens and selling them as tradeable (thereby liquid) assets. This brings technology to the VC industry that...

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Veritaseum: The ICO That's Ushering in t…

07-04-2017 Hits:82132 BoomBustBlog Reggie Middleton

Veritaseum: The ICO That's Ushering in the Era of P2P Capital Markets

Veritaseum is in the process of building peer-to-peer capital markets that enable financial and value market participants to deal directly with each other on a counterparty risk-free basis in lieu...

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This Is Ground Zero for the 2017 Veritas…

03-04-2017 Hits:78726 BoomBustBlog Reggie Middleton

This Is Ground Zero for the 2017 Veritas Offering. Are You Ready to Get Your Key to the P2P Capital Markets?

This is the link to the Veritas Crowdsale landing page. Here is where you will be able to buy the Veritas ICO when it is launched in mid-April. Below, please...

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What is the Value Proposition For Verita…

01-04-2017 Hits:81015 BoomBustBlog Reggie Middleton

What is the Value Proposition For Veritas, Veritaseum's Software Token?

 A YouTube commenter asked a very good question that we will like to take some time to answer. The question was, verbatim: I've watched your video and gone through the slides. The exchange...

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This Real Estate Bubble, Like Some Relat…

28-03-2017 Hits:47896 BoomBustBlog Reggie Middleton

This Real Estate Bubble, Like Some Relationships, Is Complicated...

CNBC reports US home prices rise 5.9 percent to 31-month high in January according to S&P CoreLogic Case-Shiller. This puts the 20 city index close to an all time high, including...

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Bloomberg Chimes In With My Warnings As …

28-03-2017 Hits:79726 BoomBustBlog Reggie Middleton

Bloomberg Chimes In With My Warnings As Landlords Offer First Time Ever Concessions to Retail Renters

Over the last quarter I've been warning about the significant weakness in retailers and the retail real estate that most occupy (links supplied below). Now, Bloomberg reports: Manhattan Landlords Are Offering...

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Our Apple Analysis This Week - This Comp…

27-03-2017 Hits:79243 BoomBustBlog Reggie Middleton

Our Apple Analysis This Week - This Company Is Not What Most Think It IS

We will releasing our Apple forensic analysis and valuation this week for subscribers (click here to subscribe - lowest tier is the same as a Netflix subscription). As can be...

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The Country's First Newly Elected Lame D…

27-03-2017 Hits:79797 BoomBustBlog Reggie Middleton

The Country's First Newly Elected Lame Duck President Will Cause Massive Reversal Of Speculative Gains

Note: Subscribers should reference  the paywall material here for stocks that should give a good risk/reward scenario for bearish trades. The Trump administration's legislative outlook is effectively a political desert, with...

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Sears Finally Throws In The Towel Exactl…

22-03-2017 Hits:84797 BoomBustBlog Reggie Middleton

Sears Finally Throws In The Towel Exactly When I Predicted "has ‘substantial doubt’ about its future"

My prediction of Sears collapsing once interest rates started ticking upwards was absolutely on point.

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The Transformation of Television in Amer…

21-03-2017 Hits:81730 BoomBustBlog Reggie Middleton

The Transformation of Television in America and Worldwide

TV has changed more in the past 10 years than it has since it's inception nearly 100 years ago This change is profound, and the primary benefactors look and act...

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More contributions from our local blog chartist. The usual disclaimers apply: this is an op-ed piece, and is not necessarily my opinion thus I offer no warranty as to its completeness, veracity or accuracy, whether explicit or implied. I am providing it for illustrative purposes only.

The following are two charts of the S&P 500 paired with the NYSE Summation Index ($NYSI). The NYSE McClellan Summation Index ($NYSI) looks at the gap between the number of advancers and decliners on the NYSE to give a net positive or negative number that indicates how overbought or oversold the market is on a given day. Using the $NYSI: The NYSI is very good at predicting the intermediate NYSE trend of about 1 - 3 months. Buy and sell signals are triggered when the $NYSI change directions or reach overbought/oversold conditions on oscillators.  The charts are annotated to simplify, but basically I am comparing the daily S&P 500 charts from 2002-03 to the present-day going back to Jan. 2008.  The comparison shows how similar today's chart is with the S&P500 chart of late 2002, early 2003.


First chart: S&P 500 against the NYSE Summation Index - $NYSI, (Daily chart, Jan 2002-April 30, 2004)

There is an old investing/trading cliche': "The trend is your friend." However, that friend can come in many shapes, sizes and colors. Technical analysis is about finding the underlying trend beneath the overall market trend to provide you with an edge in the market.  This chart of the S&P 500 2002- April  '03, illustrates a clear technical trend in a bear market; while the S&P is below its 200-day SMA, sell when the market reaches overbought conditions.  Even after a double-bottom is formed in Aug. and Oct. 2002, the technical trend gives you one more profitable trade from the short-side in late 2002, early 2003. A huge rally into the 200-day simple moving averages along with NYSI showing overbought conditions, resulted in another sell-off down to the lows.  This technical trend serves you well until the S&P 500 gets above its 200-day SMA.

Click graphic to enlarge

nysi_2002_bottom_annotated.jpg

Second chart: S&P 500 against the NYSE Summation Index - $NYSI, (Daily chart, Jan 2008-May 30, 2009)

Cliche'/proverb #2: "The more things change, the more they remain the same" is attributable to Jean-Baptiste Alphonse Karr (1908 - 1990). However, I believe that Karr's words have been quoted by several other luminaries, from George Bernard Shaw to Winston Churchill. It seems fitting, as the same technical trend that worked in 2002, was very accurate this time around.  Similar to what happened in late 2002, early 2003, the S&P500 since March 2009 has rallied bigtime into the 200-day simple moving average as the NYSE summation index ($NYSI) is showing overbought conditions. Does this mean with 100% certainty, this will result in a sell-off down to the lows...nope. You should know by now with the markets there are no absolutes; but is the technical trend still intact? Yes! Then my experience and recent history tells me there is a higher probability of a correction occuring at these levels.

Click chart to enlarge
nysi_2008-09_chart_annotated.jpg
But, but...

I know what you are thinking... 'The first chart shows the '02-03 bottom being put in, so why shouldn't I buy this next down move if it occurs?'  This is where fundamentals come into play.  While the charts are similar, the fundamentals of the economy and the market from the last bear market to this one are very different, so I won't assume anything until I see it happen.  If the technical trend changes I will re-evaluate and wait for technical and fundamental data confirming the trend has changed.  For example, Chinese stocks ($FXI) have already broken its bear market downtrend and is trading above major weekly moving averages, this is confirmed by fact that car sales in China have outpaced U.S. car sales in 2009 and in month over month sales for the last 3months for the first time ever.