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PREV (the Matrix)
I've added breadth charts to the Matrix. Breadth charts, located in line 61 and 62, will aid morning discussions. It's quicker to cite charts in the Matrix than republish them. Market breath, an important measure of participation behind the trend, suggests the current rebound is stronger than advertised by the headlines and stronger than the majority believes (see sentiment). NYSE AD line has broken out to new highs, ahead of the Dow Jones, S&P 500, Nasdaq 100, and so on. This breakout is extremely bullish. The McClellan Oscillator (MOT), another measure of market participation that smashed to EXTREME highs in January, suggests a major bottom that favors continuation of broader up impulse rather than bear market reaction. The bearish talking heads, and quite frankly a lot of investors, are simply too bearish in the face of these trends. Of course, only time will tell, likely correct the false assumptions in place today, but the name of this game is recognition of what the invisible hand is doing, not what we believe.
I have also include the Pro Public Index chart for the Dow Industrials. Look for divergences. The October high in US stocks, for example, was accompanied by a lower high in the Pro Index. This negative divergence warned that the pros had backed away from the rally. Pros are supporting the rally 100% today.
Using the Matrix
The value of the Matrix is far more than a study of price. Trends are a function of price, volume (force), volatility, and TIME. The order of their importance is as follows: (1) TIME, (2) volatility, (3) volume & price alignment. Volume and price alignment, a setup that triggers action, favors Grade A & B, early cycle markets under high compression (↓COM). ↓COM suggests extremely low volatility, a quiet trend ready to explode into high compression (↑EXP). Weekly and monthly breakout signals are not finalized until the end of the week and month, respectively. Signals generated before that could be temporary. Keep this in mind when reading alignment.
Suggested Reading: The Cycle of Accumulation and Distribution (CAD), Leverage Oscillator (LTLO), Diffusion Index (DI), Volatility Bandwidth (BW), Compression (COM), Expansion (EXP), Alignment, Upside Alignment, Downside Alignment, Sentiment Model, Intermarket Trends, VIX Model, Economic Activity Composite, Long Term Cycles.
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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.