Swing Trading the NYMO/NYSI with the Shadow Trader’s “Reference Bar”— 05/28/2024

Market Timing to reap rewards and control risk.

THE NYMO/NYSI SWING TRADING STRATEGY

The NYMO is a short term market-breadth indicator based on the New York Stock Exchange Advance/Decline line, and the NYSI is its longer-term brother.

TAKEN TOGETHER, the two breadth indicators are the clearest indication of mass market psychology which is to say: market direction, up or down.

When the NYMO and NYSI rise, it is time to buy stocks, ETFs, calls, futures, whatever money-maker one likes best. When the NYMO and NYSI (especially) are falling, it is time to get out of the way of the falling knives.

There really is no reason or excuse for arguing.

May 28th, 2024 — END OF THE DAY

The NYSI turned down last Wednesday, after a 15 day rally, giving a sell signal for Thursday’s open (5/23) and the result was a spectacular smash down after NVDA’s earning jerked the market up overnight.

It was a big bearish engulfing candle in Japanese candle charting.

On Friday, the market generally had a small oversold bounce.

(See the daily SPY chart below.)

That market action had me thinking going into the holiday weekend.