Weekly 360° view – 10 / 2012


Last week’s call worked out, again!  The market closed higher while we got a mild pull back of almost 1%, as written last week.

Setup for week 10 is neutral to slightly bearish, hence I expect a lower close. This call remains valid until Thursday. Friday’s non-farm payroll numbers can be game changing.


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Price Action


  • Direction: long term up, intermediate-term up
  • Volatility: very low,  ranked long-term volatility bellow  intermediate term volatility
  • Trend-health: long-term trending environment (TSI >1.65) and intermediate trend conditions have weakened.
  • Channel: intermediate channel position very low.
  • OB/OS: RSI(5)>50 and <75, RSI(10)>50 and <75
Overall price action is providing a bullish environment (B-J).




Seasonality is bullish for March (K). First week of March is neutral (L).




Correlation (M) among S&P500 members remains VERY low (<0.1) and continued to weaken.

Read more about  my correlation related research here.




Market Breadth (N) is at high absolute levels and continued to go-up, indicator value is at highest quartile. In the past this has been a highly negative setup.




No particular conclusion can be drawn from sector setup (O).




RISK ON for the bond market (P). Generally this is positive for the stock market, especially with a combined setup of DIRECTION & VOLATILITY.


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  1. BruceT says:

    Hi Frank
    Can you explain the basis for your bearish interpretation? The majority of the indicators are bullish, inclding one with a 65% win rate and one indicator that is ebarish with a 35 % win rate so I would say those two offset each other and the remainder are bullish. But your interpretation says otherwise and so far the action this week is in line with your prediction.

    • Hi Bruce,

      good to see you here, hope you are well!

      I know PURE price action is positive! BUT: Correlation isn’t good, seasonality isn’t favorable, market breadth is negative. In my last post I’ve outlined the importance of correlation.

      While I’m a 100% systematic trader I haven’t found a way to put the “Weekly 360 view” into a comprehensive trading system.

      Please let me know if you have any other idea what to add to this weekly report.



  1. [...] For last week I’ve been neutral to slightly bearish as written (link) seven days ago. Until Tuesday the market showed a considerable pull-back (2.15%) . Though the week [...]

  2. [...] Returns March 11th, 2012   For last week I’ve been neutral to slightly bearish as written (link) seven days ago. Until Tuesday the market showed a considerable pull-back (2.15%). Though the week [...]

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