Chart of the Day Very Rare Breadth Signal

Ifthemarketdoesnotclosestronglyinthegreentoday,thenwellgetasignalthathasonlytriggered7previoustimessincetheMarch2009low?

ThesignalisbasedonthedailyNYSEAdvancers,aproxyformarketbreadthandparticipation?

IftodaysAdvancersnumberdoesnotcloseabove2,000,whichlooksunlikelyatthemoment,itwillbethe9thstraightdaybelow2,000?

Ivemarkedtheprevious7occurrenceswithredcirclesontheSPXchartbelow:

Chart:Bloomberg

Thechartshows5instanceswherethemarketreboundedorcontinuedrallyingafterthesignaltriggered,andinmostcasesatleast50indexpointswithin2weeks?

Inotherwords,itsgenerallyabullishsignal?

The2outliersareinJune2009,whenthemarketwentsidewaysafterthesignalbeforeeventuallyburstinghigherinJuly,andinAugust2011,whenthemarketcrashedanother150pointslowerinthe3daysfollowingthetriggerofthesignal。

Todaysoversoldsignalindicatesagoodspottolookatsomelongcallideas,asthepreviousup-movesofftheshort-termbottomshavebeenquick,notcostingmuchintimedecay?