Market Posture for the Holidays. Feel the spirit!

I like going through the market posture on the weekends. Not so much because it's so different from a day or two before, but because you can look at the bigger picture using all complete weekly candles. Looking at this way tends to smooth out the noise of each individual day and somehow makes the process a bit easier and perhaps more objective.
Here is the Market Posture Grid as filled out at Thursday night's meeting.
(Click on image to see it bigger.)


Below is the weekly chart for the SPX. It's hard not to notice that there is a very clearly formed double top formation in process. But like any pattern, it's just a potential pattern until it is complete which is when the support line is broken in this case. It's also very apparent that the higher high is less of an improvement than the previous higher highs. Same with the higher low, and on the daily chart it's more of an equal low. Nevertheless, the intermediate posture on the SPX is still arguably neutral due to no major lower low and still having no major lower high despite the clearly bearish short term trend. What further supports an at least neutral intermediate posture and potentially bullish short term posture is what looks like a possible short term reversal at significant support. This week's candle is clearly bullish(engulfing and then some).
Thursday night we spoke about potential points of resistance to look for in this market rally. Having been a very significant point of support and resistance many times in the last five months, 1490 seems the most obvious level. Interesting to see the rally peaked out just a dollar short of there intra-day on Friday.


The weekly VIX chart also shows some reason to be bullish at least for the time being. The long term trend in the VIX is clearly up and this is a long term bearish indication, but remember that it is the intermediate and to some extent short term that we should be most aware of, as the "long term" shows us what has happened somewhat long into the past. The Intermediate and short term will give us a better idea of what to expect for the immediate future.
On an intermediate time frame, we have a lower high even if just slightly, and a lower low from mid August to late September. Looking a the bearish reversal candles in beginning November, we see that they have been confirmed in the past week's lower close. Furthermore, this week, we got the important piece of the puzzle we were waiting for which was a lower low on the short term VIX, a movement below daily support(and former resistance) just below 24.


For the final component of the Market Posture routine as taught by Investools, the Market forecast is giving us a clear bullish reading on the intermediate term with the green intermediate line having moved upward out of the lower reversal zone.
There is also seen one of the major "signals" that the Market Forecast indicators give which is the "Near Term Divergence." This is where the blue Near Term line puts in a higher low while the SPX itself makes a lower low(opposite for a bearish divergence). As with any signal, it doesn't tell the future or work out every time, but in this case it has worked out at least short term.


It's hard not to feel the fear in the air and even to notice that the SPX is still under the 200 MA even with the rally of the past week. I'll let you do the process with the Nasdaq, but it's interesting to note that doing the three pronged posture in as objective a way as we could, we came up with a Bullish posture for the Nasaq and Neutral for the SPX and only then looked to note that the SPX is below the 200 MA and the Nasdaq is above it. Perhaps it is not earth shattering news, but noteworthy nonetheless.
There are certainly lots of things to be worried about with the economy and even the charts. But there are also potentially positive factors for the market, so who knows?
I won't list the negatives, but as for a few potential positives from one who is FAR from an economics guy, how about oil prices finding a potential top?

How about the weekly bearish engulfing on the Yen at long term resistance? It may be short lived, but it looks like it needs to come back in a bit before moving higher if that's going to happen.

How about the plunge in the US Dollar coming to a halt at least for a while as is shown possible by the bullish engulfing candle on the weekly chart? It's awfully far from the 40 week MA.


This may be grasping at straws, or however that saying goes, but the home builders have just been relentlessly hammered for a long time. Even if the outlook is still far from rosy for them, an end to the plunge is inevitable at some point. We know that all homebuilding in the US will not come to a complete stop and therefore the homebuilders will not go to zero. (All you gloom and doomers, yes the apocalypse is the exception.) Though far from a convincing bounce just yet, we do have a bullish engulfing at an old support level and even bullish divergences on both the MACD lines and the MACD histogram. I can't remember who, but I believe someone from the big name investors out there announced taking a major position in one of the homebuilders this week.


For an even more thorough feel of what "The Market" is doing, I encourage you to build a watchlist of the Sector Spiders. 9 ETFs that as a general snapshot show you the action of the market in 9 clumps of related stock groups. There are many ways to look at the sectors of the market and the "sectors" seem to be defined differently by all, but this seems about as quick and easy as any. Notice that the XLF put in a monster bullish engulfing on the weekly chart with its highest weekly volume to date.

I do realize that my showing only the positives and not the negatives seems an awful lot like being a bullish cheerleader. But really, I just want to focus on the positive a bit, because all we've heard about lately is the negative.

There is, without a doubt, downward pressure on the SPX and tough resistance at 1490 even with this week's rally. I will look to 1430 (support from the inverted head and shoulders in August) for a potential level of support. Just about all of the above will probably be null and void with a decisive break below 1406. With a real break below 1375.......Look out below.

Big picture posture

I don't normally look at the Dow too heavily, but with all of the talk about global expansion and the industrials outperforming due to their exposure to overseas growth, it's interesting to consider the Dow in addition to our normal go-to indexes.
Though the breakout to recent highs did breakdown and ultimately "fake out" fairly quickly, there is still a strong and in tact long term uptrend with a trend support line just below us. If that doesn't hold, the next likely area of support would be 12,750. After the recent craziness and fear as high as I can remember in recent years, is the Dow really likely to fall another 500 points in the coming weeks? Remember, the crowd usually gets it wrong, or so they say. I suppose it's possible this level will break and the quick drop to 12,750 could happen. After all, it's really only 4% and would actually finally achieve the 10% correction that so many have longed for. But again that is a strong and healthy long term uptrend in 30 mammoth stocks that don't just get going or turn on a dime. Even if we are destined to test that area for an "official" correction of 10%, the past two weekly candles are pretty major inverted hammers, showing an inclination to bounce. We shall see.


SPX is also still in good looking long term uptrend, though the breakdown after the fake out of the trading range at the top does seem a bit more severe. The trend line from the mid '06 lows is pretty much broken. But there is almost surprising support from the old channel resistance line in blue. Also the weekly candle shows an inverted hammer like the Dow. If this area doesn't hold, the next likely area of major support is 1,380. After that, all the way down to 1,325. The first level would be roughly an 11% correction from the top, the second would be almost 15%.


For a closer look at the SPX, I'm going to be a bit obnoxious and put up a chart with way too many indicators and lines. Basically, I just don't want to do a third SPX chart. One thing that I think is quite interesting, though I'm no Fibonacci pro, is that the low from last week that provided intraday support again this week is right on the 38.2% Fib retracement line, the first of the most significant retracement levels. The 200 MA is also providing support in addition to the diagonal and horizontal support lines present on the weekly chart. In total, there are 5 support lines of one kind or another, including the fib line, around the current price.
The Market Forecast indicator is actually quite bullish, save for the longer term sentiment indicator, which is heading down with plenty of room to go. But after last week's cluster, the intermediate term green line has exited the lower reversal zone for the official green light on playing the cluster. To strengthen the bullish argument being given there, the momentum and near term lines are lining up for a nice "Intermediate term confirmation" signal, another of the signals Investools teaches on these indicators. In short, the two shorter term indicators line up to be the wind at the back of the intermediate term line.
In short, I'm expecting a bounce here. But the real test will be when the index tests the bottom side of the old support and recent resistance line at the 1490/1500 area. If that holds as resistance, we'll likely see some serious sideways choppy action for a while or possibly another leg down and potential beginning of an intermediate term downtrend.


I think I showed VIX with a weekly chart last time, so I'll just stick to the daily. It's rocketed only higher and seems very likely to come in some. Even if it is destined to go higher, there needs to be some kind of retest of the new range support. I just can't imagine the VIX going parabolic without a true market crash happening. Regardless, it is clearly telling us that fear is high right now. It's also telling us to be on our toes for a peak, as once it is high and then turns, THAT is the time to buy. So my take is that this is very close to being a bullish indicator right now. One point of interest from this past week is Wednesday's action. Though the SPX had a big strong up day, the VIX did not have an impressive down day and actually couldn't break below the recent support/old resistance level at the 20 area. I took this at the time to mean that the up day in the SPX was not to be trusted because people were still buying puts heavily. But really, just look at that Doji star hanging up there. Can it really go higher in the next few days? Of course it can. But is it likely? I doubt it.


The Russell 2000 small caps index has shown much relative weakness in recent weeks, but this week was quit strong. With what we could call a bullish engulfing weekly candle, it seems to not want to give up these support lines, both diagonal and horizontal.
With all the talk about how strong the Big Caps are, could this be the time to get into small caps? The long term view seems to indicate so.


Again, I'll leave the Nasdaq up to you. But here's my thinking. The Dow still shows the most relative strength. The SPX, with many more components to it, is still strong in a long term sense, but the short term is looking a lot more shaky. If the Russell and the small caps bounce from here, the small caps may finally wake up and actually provide a bit of support to this market. I would think that would only help the SPX regain its composure next to the Dow.
Take a look at the Nasdaq versus the Nasdaq 100(NDX). The NDX looks stronger than the composite as a whole, which makes sense considering the NDX is the 100 big boys. If the smaller guys, many of which are surely in the Russell 2000 can get it together, perhaps the Nasdaq composite can work its way through the congestion of "overhead supply" it has to deal with.

Any comments? I dare you.

Bueller?

Making a list

We spoke about making a group list together at the next meeting. We're still working on the group rules, but perhaps we can squeeze a bit of list talk in there too. As IBD always points out, corrections or bear markets are a great time to build new lists for the new bull market or next rally. It sure was a good time to do so in March.

As a bit of reference I wanted to point you toward the last bit of posting I did on making a list. We don't HAVE to do it like that. It's just the way I did at the time and shows a bit of my thinking on the subject.

Back in march I made list and did a post explaining a bit about my thinking for the list at the time. It focused much less on the strong group of the time and more on strong stocks in various groups. Here's the post on the Watchlist Criteria. It was posted on March 31 just before the SPX was successfully tested as new support the old resistance from the middle point of a very clear double bottom reversal. Very nice rally happened from there.


A proposed list was put up on April 4. I made a portfolio out of it with 1 share of each stock at a purchase price of that day's close for each. It doesn't say anything about trading them, but the success of the basket as a whole since that day speaks volumes to the merits of strong fundamental scores and some of the considerations I explained in the post about criteria. It also speaks to the value of relative strength, be it versus an industry group or the market as a whole. This should also be a consideration for our new list.
Here is the latest status of that list from April. After being at around 30% profit in recent weeks, it's now showing 19.6% profit. Not bad for just over 4 months.


As for the WFR trade I setup in that post, it got stopped out on 4/13 for 13.60 per contract and a total loss of $720. Perhaps the stop was a bit tight and I wasn't happy to miss the quick rally to follow. But I certainly was not upset to be out of it when it gapped down big on earnings.

The CMG triangle in that post didn't quite pan out as a stellar ascending triangle liftoff, but a kick ass earnings call sent the stock off strong.

I like Ben Stein's articles. Always a very level headed take on things. How Speculators Exploit Market Fears.

Market Posture, again. :)

My Gosh! Is it really over a month since I posted a blog? Interesting, though, to read the last one. Not a bad read on things, I think. And VSEA has done well since then. Today was a seeming breakout that I almost bought. But because it was a resistance breakout with less than 150% average volume, I decided to pass, particularly considering the shaky nature of the markets at the moment. There was a lot of buying going into close, but in after hours it sold off a good amount of the day's gains, even if on low volume. It remains one to watch.

In any case, here's the rundown on what we came up with for the Market Posture. I want to remind that the intention is to come up with a posture for the intermediate term, meaning not what's going to happen tomorrow, but what we might expect in the coming months. And also, because this was a tough one to call, I want to emphasize that technical analysis is as much or more art than it is science. Therefore, we will all see things a bit differently. Because I was leading the exercise, it is of course skewed toward my take on things. Others had at times slightly different views. Whoever is doing today's Market Wrap on the Investools site might have a totally different view. There is no "right" answer. We're each entitled to our own interpretation of things and should become well practiced in making such interpretations. That's the whole point of the Investools education.
Without further ado:


SPX:


On the shorter term, while the recent downdraft feels awfully bearish, there are quite a number potential support lines just below us now. Furthermore, though the shorter term and even intermediate uptrend clearly broke, there is still no official downtrend when considering a trend as a series of highs and lows. As a result, the SPX chart was considered Neutral.


Market Forecast, is bearish because the green intermediate line is the lower reversal zone. Market sentiment line also bearish with tons of room to go yet.


Finally, the VIX. The Volatility index, or as some people call it, the Fear Index. Without even looking at it, would you guess from the market lately that fear is high? The Vix surely supports the thought.
"When the VIX is Low (and turns up) it's time to go (sell)." "When the VIX is High ( and turns back down) it's time to buy."
It is high now and possibly turning back down. But it really hasn't yet. But it does seem like a pullback or breather would be necessary for it to surge yet higher right now. Therefore, we called it Neutral.


What is really interesting is to look at the very long term chart of the VIX. This is as far back as the data goes. I remember thinking and hearing in the past year that perhaps the days of high volatility were over. Better technology, more sophisticated markets, better risk control. Perhaps not.
It has moved back above what was for years the floor. As Jim pointed out last night, if the market does bounce from support at the current level and approach the high again, but the VIX fails to get and stay back below the 20 or even the 18 area, than the VIX will probably be telling us that the move is not trustworthy. This would confirm the same message Jim has been hammering away at on the $NYAD, which remains completely broken down from the top despite the DOW still holding up.



I hope this makes sense to you, whether you agree with the interpretation or not. Whatever the case, the most important thing is that you question and interpret it for yourself and don't just accept whatever I or whoever else has to say.
I'll let you go through the process and do the NDX yourself.

Until next time!

Market Posture

In my last post on June 3, despite the apparent reasons for caution, I concluded that things were still quite bullish. I am trying to reiterate to myself as well as others that a trend or posture isn't "changed" until it changes. So since the various significant levels and moving averages hadn't yet been broken, a trend trader could only assume that things will continue on as usual. Since then, some of the significant red flags have been raised. The uptrend has not yet been broken in terms of highs and lows, but we have put in an equal high and backed off that level, leaving it as a fortified resistance point and putting the uptrend strongly in question. A lower high and lower low will officially change the trend to downward. Until then, we'll noodle more or less sideways.
As for the moving averages, the 20 MA was broken, reclaimed and again broken. Meanwhile, the 50 MA has provided support on two quick bounces. Friday's close was just below the 50 MA, so I'll call it breached but not definitively broken. Will it hold again or finally crack?
You may also notice on your charts that the SPX is now showing a fresh set of 3 red arrows, the second set that has recently appeared since the big run began with a double bottom reversal in March.
Notice also that the Market Forecast intermediate term line (green) is heading down and has exited the upper reversal zone. Obviously, this is bearish for the intermediate term on this indicator. The Longer term orange line is still above 80 but is rounding over and showing potential for a more meaningful downturn, though 80 remains the official signal line to call it bearish.
Keeping things simple, though, we must remember that price is king and the most obvious signs now will be the strong breaking of the 50 and certainly taking out the recent lows around 1490.
(Click imagine to see it larger)

For the third part of the Investools taught market posture procedure, we look to the VIX. I want to emphasize, particularly to ease Jim's mind, that these other aspects of the Market Posture procedure should be looked at as confirming indicators and in no way should be thought to hold more sway or even equal the power and significance of the index price and posture itself.
With that said, last time I suggested setting an alert to go off if the VIX broke above its resistance at around 14.50. That alarm was sounded and the VIX has since dropped back below and again risen through 14.50. This weekly chart shows it most clearly. The bias looks upward to me.

But even if the market doesn't drop and in turn lift the VIX, I suspect that this slightly higher level will be sustained and perhaps with a wider range from the 17 area down to 12.50 if not 14. Whatever the specific numbers for support and resistance on this volatility index may turn out to be, the message seems clear that rise or fall, the markets will be more volatile for the foreseeable future. For the active trader, this is actually a good thing. For the buy and hold investor, maybe not.
I'm not going to go through the whole Posture thing for the Nasdaq too, but for a bit of comparison, here is a view at some of the major indexes with weekly candles. I always like looking at weekly candles because it simplifies the daily noise into a clearer big picture view.
I've left off the Dow Jones, as it closely resembles the picture of the SPX. I've also used the Nasdaq 100 because the composite shows a discrepancy between the TOS charts and Prophet charts and I think the data is wrong. Besides, the NDX is perhaps a better, more focused look at the powerhouses of tech.
Most noteworthy to me is the succession of weekly bearish engulfing patterns on the SPX after the recent series of bull runs. This speaks strongly for the likelihood of a trend reversal. What these matching bearish engulfing patterns on the weekly chart translate into on the daily is a potential double top pattern.
But the other thing to consider from a bullish perspective in these charts is that the tech indexes have not shown the same strength as the SPX and Dow since the highs in February. The NDX and SOX especially are showing a bit of relative strength compared to the SPX. While the SOX did sell off with the rest of the market on Friday, it broke out to a new 52-week high on Thursday.

Could the semis and tech lead the next leg of the bull market?

Other factors to keep in mind:

Crude oil broke above its recent resistance level. From here, up seems more likely than down. You can check here for a longer term weekly chart. But here's the daily.



I won't pretend to be very knowledgeable about bonds and treasury notes. But at the very least it makes sense to me that if yields go up, the appeal of being in stocks is decreased for long term investors. We've heard a lot about the 10 year yield rising lately. It may find some resistance here in the area below 5.5, but this very long term chart going back to '81 shows what might be a very significant long, LONG term trend break forming.



I know I've said this before, but I hope to get a new and improved watchlist up soon.
For now keep eyes tuned to VSEA. After a wild up and down day on Friday, it closed near the top of the range, breaking the recent downtredning resistance and peaked back above the 50 MA.

LRCX also looks interesting, though not as high scoring.
Tech monster Google(with an impressive F/E score of 3.88!) is out at a new high after testing old resistance as new support. If you're interested in getting in this stock and not missing the boat again, this seems like as good a time as any. Remember, there's not that big a difference between buying 10 shares of a $50 stock and 1 share of a $500 stock.


On the downside, REITS are looking weaker and weaker. Some have clearly begun breaking down, others are just beginning to crack now. I'd like to see some of the first to break down come up to test resistance for a better entry.
Homebuilders have seen renewed selling. Banks look pretty weak too.

Have a great week!

Bullish, Bullish, Bullish, some stocks to watch

Well it seems that it's business as usual. Just when the market gives you pause to think the uptrend might tiring, the potentially bearish weekly candles from last week all got wiped out with a strong week across the board. Particularly encouraging for the bulls is that the Nasdaq and Russell, which I pointed out had been lagging, pushed strongly above their recent resistance.
This image shows the weekly candles for the major indexes since Jan 1. Judging from these alone, it seems that the intermediate to long term trend is still quite bullish.
(Click image to see it bigger)


The Vix remains in its low range. It might be a good idea to set an alert for if it moves above 14.50 or so as a wake up call to assess things.


One observation I'd like to make is something of a cautionary bit. I tend to be a worrier, which doesn't really help in the face of a strong bullish market, but it is worth considering the risk in the air when there seems to be such a strong sense of confidence and perhaps, complacency among the bulls. I think this mockup shows my thinking clearly enough.



The fact remains, as always, that an uptrend is an uptrend until it's not anymore. So everything is all systems go at the moment. But it is interesting to consider the momentum of the last year and whether it might just be waning a bit. Last week's gains were done in a short week(whatever that means) and Friday's finish was on less than average volume.


That said, there's a ton of strong looking stocks out there.
Here's a china play.
CTRP - Very nice 5 year chart with a recent high volume week of an earnings jump. Biggest weekly volume since the end of 2/27 China stock market scare.



It even looks great on the daily chart with the Investools study set. It's looking prime for a support bounce and a set of fresh green arrows.



GROW had some serious volume on Friday for a bounce up and further forming of a potential ascending triangle. It's early to assume that it will bust through the triangle resistance, but a play up to that point would still be a pretty good risk/reward ratio for those bold enough to play it.
The volatility bouncing down from resistance in the last 5 months is unnerving, but considering it was a $2.50 stock just two years ago, maybe this is a very natural and healthy period of consolidation.



Here's another from the investment world.
AINV - It looks like it needs to come in and establish new support here after such a quick upward move, but it's certainly one to watch.



The growth is smaller than we look for, but it is better than its group. Investools has lumped a lot of industry groups together on their recent change to the Big Chart and Industry Group designations. So some stocks, like this one, are compared to a group of stocks that are not entirely accurate as competitors or comparable companies.
This from moneycentral.msn. com.

Anyway, one can quibble about which website is correct or if growth estimates are suitable for one's standards, but a strong chart speaks for itself. The stock is at an all time high after 4 days of above average volume and big moves.

And last, but certainly not least.......
Our very own VSEA!
It's a bit difficult to figure out what the SOX is doing, but VSEA appears to have put in a new support level and it may be ready to resume upward movement.

First the SOX, for your reference. Friday's candle is not exactly what we want to see at potential resistance from a double top pattern.

But VSEA does look nice.


Have a great week. I'm pretty busy in the coming weeks, but I hope to put together a new and improved watchlist for the group. So stay tuned.

Roaring Market, tired? REITs seem to be.

The Market has been on an amazing tear lately. Big caps have clearly been leading the charge with the Dow and the SPX at record highs and showing no signs of weakness. The Nasdaq and Russell 2000, however have not been quite as hot. Both have spent time below their 20 MAs and the Russell has even plodded along its 50 MA still barely peeking above the peak before the late February sell off. In recent weeks they have consolidated and only in the past week made an effort to retake new highs, though not yet successful. It seems to me that the Dow and SPX are more than ripe for a pullback, but the Nasdaq and RUT may be ready for a breakout to further heights, finally joining in the exuberance. The question is, will the Nasdaq and RUT step it up to join the big caps surging higher or will they all succumb to the weight of a big caps correction? Whatever the case, the easiest first warning signal to watch for will be the 20 MA on the SPX. Until that is broken, there's no reason to worry. After all, we use the charts to show is what IS happening, not what we think is going to happen, right? This is how we take the emotion and guesswork out of the equation.
(click imagine for bigger view)


One important factor as far as the Nasdaq is concerned will be the Sox, which seems to be at a make or break area. After breaking out of its previous range, it looks like old resistance became new support. So a bounce from this level would make a lot of sense. The inverted hammer yesterday(needs confirmation) lends support to that idea. Nevertheless, it isn't a good sign that the Nasdaq was so strong and the SOX tried but then didn't ultimately contribute to that gain. The bullish case for the SOX is further dimmed by a clear double top formation. If it does break back below this support area, the double top will be confirmed as a pattern and we would look to a target of about 470, right back where it was before breaking out of the symmetrical triangle.


If, by chance, the SOX does rally from here, I'd love to see VSEA break its pullback after not holding the level it gapped to. There are a few potential diagonal lines of support and a confirmed hammer a few days back. So it's not out of the question, though there is still some room to go yet before completely filling the gap.


Oil stocks have been ripping lately. How about that SLB flag we discussed at the last meeting? I hope somebody took this trade. I didn't because I was a bit scared by the upper shadows on the 14th and 15th. Would, coulda, shoulda....


I read a good article on the weakness of REITs.
Stocks Can't Fall? Check Out REITs' Retreat. It gives a good perspective to consider with respect to the strength of the current overall markets.
It is interesting too that the weakness of this group has all but been ignored in the recent market hysteria. People go straight to the homebuilders for weakness mentions, but this group's weakness is more recent and may have only just begun. I can't remember, but I think we may have looked at this chart at the last meeting. Regardless, there is a pretty clear head and shoulders pattern there. The long term trend line has not yet been broken, but it seems likely in the coming months to see continued weakness from this group. The Head and Shoulders pattern is said to be one of the most reliable reversal patterns. With a height of roughly 10 pts. on the IYR, an expected target would be around 72.50, coincidentally an old area of resistance.

Just for reference, here's a sweet, year-long head and shoulders pattern on the Homebuilders. Actually, it's kind of funny to look at the last 3 1/2 years as a giganto pattern with a neckline at 550. But I don't think that one is going to pan out, because it would call for a target of Zero. We'd be in serious trouble! :)
Notice that the more recent peak of the homebuilders in February coincides with the all time peak of the REITS.

Anyway, the REITS do look weak, but not quite as gory as the homebuilders.....YET!
I don't know what happened yesterday, but there was huge volume in the IYR was it bounced at both horizontal and diagonal support. So it looks like a bounce is likely, but I'll be watching this group for short entries in the coming weeks if the market does ever run out of steam.

You can certainly search the Investools site for Real Estate stocks, but I went straight to the source to find out what is in this ETF. The Ishares page for the IYR holdings.
I went through a bunch of the top weighted stocks on that list. Many of them look ugly.
Here are some I think have fairly clear lines to watch, either for a support break or a resistance bounce.
ABM

KIM

SPG


TCO

UDR


VNO


It might seem foolish for spending all this time on bearish ideas when the market is ripping. But just as we should be looking for stocks with relative strength during a downtrend for when the market does turn upward, we should also be looking at relative weakness during a bull market for when the market turns over.
Happy hunting.