Great Way For Timing Market Reversals

by Ryan Mallory

Now obviously there is no "fool-proof" method of timing market reversals, but one of the contributors over at the SlopeofHope.com was kind enough to show us one of the ways he tracks market changes, and quite honestly, I was a bit skeptical at first, but the more I looked at his chart, the more I was impressed by how well it showed market extremes and nearby reversals.

Basically, all I am using is a traditional NYSI - Advance/Decline on a weekly basis, and the market timer is the overlay of a stochastics of the NYSI indicator (middle chart below). Then below that you have the weekly on the S&P to show how the extremes on the NYSI stochs coincides with the S&P chart.

I've never been a big fan of a lot of indicators, and always very hesitant to look at much more than price and volume, but this here was something I'd be stupid to not pay attention to. I will definitely be paying attention to the chart below on a daily basis going forward.

Hope you enjoy it.

Click here for the NYSI Chart and Reversal Layout.