Equals Over Plus

I espouse the importance of not just thinking outside the box, but designing our own box and then thinking outside of it.  In trading it is of great importance to think differently and avoid the ensnaring herd mentality.  Even if our trading beliefs are influenced or pilfered from others it is still exceptionally important to return to our own knowledge, experience, and expertise for metaphor and guidance.  While the lineage of folksy wisdom passed down from generations of traders is often applicable, there is still plenty of room in trading to develop our own analogies based upon our personal and unique situation.

Over the past few months I have begun to preface my analysis with terms such as, "the market on my time frame," or the "market that I trade."  The importance of this is that I am making myself aware and reminding myself of my place in the trading ecosystem.  Continually reflecting upon my time horizon, the behavior of the market within this time slice, and how stocks are trading over this time period assist me in keeping in cadence with periods where the market is conducive.

Another technique I have started to explore is my connection with chess and what I can learn about the market through using what I know as a filter.  When viewing a position one of the first assessments to make is who is better.   Thereafter looking for imbalances, weaknesses, positional advantages and tactical exploits can be analyzed.  Recently when perceiving the market I've begun to avoid binary terms such as bullish or bearish which often lead to a biased opinion and instead have begun to add some nuances to the complexity of the situation through chess terms.

Advantage

Given the current structure of the market over my time frame I would consider this to be a plus over equals market.  Breadth as gauged by the  $MTMW and #T2108 we're both extended to the downside and a bounce was a high probability event, however there hasn't been overwhelming buying to suggest that the market is currently conducive to my time horizon.  When there is hand over fist buying the number of stocks above their 20 period moving average should accelerate rapidly, but this is clearly not the case currently.

Lack of Thrust in $MTMW

#T2108 Bounce

In addition, there is still net negative price action across multiple time frames I pay attention to with the exception of the past 5 trading session which has had more stocks breaking out than down, but just barely.  When buyers show up these numbers should rapidly accelerate as well.

MM

An argument could also be made that this is an unclear market as there has been a lack of downside traction as well, and the breadth numbers while negative are not enough so to suggest there is an exodus by those who move markets.  For that to be confirmed there would need to be a swift downside acceleration to this market.  While it's my opinion that the market has just undergone a very weak technical bounce after extended breadth on a shorter term time frame and that bounces are opportunities to short index ETFs, should there be a positional shift that moves the needle to a plus over equals market I will change my assessment accordingly.