AD Histogram
Click on the thumbnail for the full size chart
This is one of the most promising potential very short term indicators I have encountered in a while. It is not perfect, but when it is right it is very right and when wrong very wrong. It does seem to be, however, more right than wrong. With a little filtering work, I believe the “wrongs” can be mitigated easily enough.
Basically, when advancing issues are greater than 95% of issues traded for the composite, that is a potential short term short sale on the next day’s open. The inverse is also true. 95% or greater declining issues is a potential buy. Neither indicates a new trend and the trade only last for a day or two. Don’t get confused when you see one of these pop up for one of the ProShares “short” ETFs. You have to actually think when looking at one of these.
Needs more work, but a lot of possibilities here.
