A widely used health signal on the stock market has reached the highest values for all times, which is a potential basis for further rallying from US benchmark benchmarks, technical analysts say.
The New York Stock Exchange Progress / Decline hit the highest level on Wednesday, as shown in the chart below by StockCharts:
Paul Shaz, president of Heritage Capital, told MarketWatch in a telephone interview that "Bear markets never, ever, never start when the A / D line reaches high values. "
A Woodbridge based Connecticut investment also manages that the A / D line is 90% accurate when forecasting large
Among the technical analysts, the A / D line is the most widely used measure of market latitude and represents a cumulative sum of the number of stocks that are advancing towards the number of stocks that are decreasing. When the A / D line rises, it means that more stocks are rising than they are decreasing, and vice versa.
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The number of profits on the stock exchange is more than the number of losers 1.673 to 1.079 on NYSE and 1.492 to 1.168 on Nasdaq, while the volume of upward shares represents 64.8% total volume of the Big Board and 64.5% of the total volume of Nasdaq. The upward reading of the A / D comes after the shares expanded a rebound that took the main benchmark levels to its highest levels in 2019 after suffering the toughest records for the trading session just before Christmas. Dow Jones Industrial Average
DJIA, + 0.24%
grew 18.8% from its low level since December 24, the S & P 500
SPX, + 0.18%
also grew by about 18%, the Nasdaq Composite Index
COMP, + 0.03%
advanced with 21% of this lowest value.
The decline was due to a combination of growing fears of an economic catastrophe stemming from China's trading partner with the United States and concerns. that the Federal Reserve is moving too aggressively in normalizing monetary policy and creating waves in financial markets.
These questions are now withdrawing from Wall Street investors, expecting Beijing and Washington to reach a pact, albeit imperfect, soon, and the Fed has announced a wait-and-see approach to raising borrowing costs for investors.
"The week after the bear's case is disintegrating; everything that the bears hung, is falling apart, "Shaz said. "This does not ensure that stocks continue to rip higher, but it is seizing the stock market from a massive downturn," he said. Parets on the All Star Charts blog is also optimistic about the A / D record. "This upward expansion continues to point to higher stock prices of any intermediate perspective," he wrote on Wednesday. Of course, worries about the durability of the current rally continue to exist, especially given the apparent speed at which stocks return from the ugly bottoms.
Skepticism about the current bounce is partly due to the belief that share gains have renewed concerns about share ratings, as earnings are not expected to shine over subsequent periods. The S & P 500, a popular measure of stock value over the next 12 months, is its highest level since October at 16.27, after touching a minimum of 13.59, according to FactSet data (see table below): 19659019] Source: FactSet
In addition, there is concern that the more the markets improve on the basis of the US-China Trade Agreement, the more likely the Federal Reserve is to resume its obvious pause in increasing interest rates,
"The bubble hopes to be surprising the strong US and Chinese breakthroughs in the US and China will keep the consensus forecasts of declining revenues since 2019 is progressing as tax cuts keep earnings forecasts in 2018. The problem is that even if this happens at 16.5 x 2019 CY profit, large equity shares appear to be fairly valued, giving only 4.2% consensus growth prospects to 2019 EPS, "says Alec Young, managing director of FTSE Russell Global Markets Research, referring to a reduction in Taxes at the end of 2017 signed by the law
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