Still Red.

This graphic really shows how effective the Breadth Indicator can be. Sure, after the indicator turned red, there was a little profit to be had – and then lost. It did foretell the upcoming volatility though. I’m still firmly out of long-term trading.

Early Warning System

I was just telling my wife the other day: “hey look at my breadth indicator. The market is going up but the indicator has turned red. Things are looking dicey.” Sure enough, it has acted as an early warning system.

I use this to time my long-term investments. Unfortunately, the recent market turmoil has bitten my short-term trading too. It sucks when you get stung on the long AND the short end. Oh well, it’s only temporary…