A really simple internal that I like to look at each day especially on the open is the NYSE advancers. Today is a good example of how it can help. This morning I was eyeing MEDX as a bullish movers. As some of you know I use an opening strategy that looks for movers on the open and is a very short term position. MEDX was on the list this morning. I am still looking at it but I have not entered. I also used the ADV to keep me out of the long side on the futures. So how? well simply looking at the number at which the ADV opens. Let say off the cuff that an open under 800 is usually a bad sign, but under 500 is a really bad sign for the bulls. An open between 900 and say around 1500 is pretty regular and would usually yield a reversion type trading day. An open above or close to 2000 is very strong. So if you look at this chart you notice that it has been around the 300 mark since the open. This tells me to be very selective on and long positions, and in fact usually I will use this warning to stay flat. I also will not fight the low level reading in terms of the indexes. Until we see the indexes get back over the opening print and the ADV stop hanging out this low, the long side is not a consideration. So we sit and wait. (http://www.tradeinwaves.com)
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