 The following is a presentation of TFNN. Trade what you see with Larry Pezzavento. Call now toll free at 1-877-927-6648 or internationally at 727-873-7618. Now, Larry Pezzavento. Okay, looking good. Billy Ray feeling good, Lewis. Well, we're going to show a little bit different chart to start off the show. This is the chart of Federal Express. Those of you that were on the show yesterday, you remember the gentleman from John from Colorado called in and bought the stock at $249 on the APCD pattern. And he wanted to know with earnings coming out what he should do. And I said, well, you're basically looking at something that's really negative here. I posted the chart and it opened down $25, folks, in FedEx because of bad earnings. The reason why I was so nervous was three reasons. First of all, the APCD pattern had completed and it went below the area where we thought it was going to go to by just a little bit, but we were below the 78% level. That was the main thing to look at. Okay, second thing is it's a weaker than market stock. And the third thing is you have unlimited risk coming in to our earnings and look what happened. And believe it or not, the gentleman called me early this morning and thanked me because what he did was he bought it at $249, it rallied up to $253, which was his first profit objective. And so he decided to get out and not take the risk and he turned out to be a good thing. But that's the main thing that we try to talk about here, folks. It's not the amount of money that you make. It's the amount of money that you don't lose. Look at the difference between a $4 profit and a $25 loss. That's a huge difference and that's the risk. See, that's the big unknown and that's what happens with these earning things. So let's remind ourselves when you see that, add up and make sure that you... Now, if this trend had been up or something, totally different, but that's not it. We're seeing corrections in Facebook and other things that are also very, very important. Now, let's go across... By the way, today our guest is hopefully going to be Jeff Hughes of Alpha Insights. But as you can imagine, folks, with the volatility that we're seeing now in the market, some of these folks like Stan Harley the other yesterday were just not able to make it. So we understand where it's coming from. So let's pay close attention to these things when they do come on because they've been very good at what they're doing. I'm going to cover the European markets and then I've got a real interesting question from Mike up in the Northwest and I think you'll like to hear that story. Here is the chart of the FTSE. As you can see here, we had that double bottom. You can see the monster rally that we've had. We made it all the way up to the 61% retracement with all kinds of gaps and everything because there's so much emotionalism in these markets that's not to be unexpected. And then, of course, if we look at the German DAX here, you can see here that we've done pretty much the same thing. We made much lower lows in the German DAX than we did in the FTSE, but you can see the FTSE now looks like it's getting... Excuse me, the German DAX looks like it's completing a ABCD-Gartley pattern up there at around 15,625. So that's it. Now the question that Mike up in the Northwest asked was how did I learn how to do some of these patterns? And folks, basically what I did was I knew what these patterns were. I didn't quite understand all the ratios until 1988 when I met Bryce Gilmore in Chicago. He really showed me how all these ratios fit together. He had a program called the Wave Trader. And the Wave Trader basically went in and measured all the swings and relations of those swings so that you could see them in live, just watching them unfold as they were making, and it had a scale from 1 to 10. In other words, if you had three major ratios at a spot or seven or eight, whatever it happened to be, it gave you a ratio from 1 to 10. Well, when you saw 8, 9, or 10 on the Wave Trader, you knew that something was getting ready to happen. I'll give you a rough idea of what this is. Let me just show you. This happens to be the Percevento Index thing that's in the Ensign program. This is very similar to the Wave Trader, a simplistic way of using what the Wave Trader did, but I'll show you how I worked around it. Basically it just shows you all the ratios and proportions of these ratios. Now the Wave Trader was a little different because it put them in color. Well, I can put those in color in the Ensign program easily. When Bryce used to come from 1988 to 1994, he came to Pismo Beach and spent at least two or three months every year with me at the trading home there where 20 men lived and where we all traded from. It was a great time, but he certainly knew these markets better than anybody, but he explained all these ratios of the square roots of five and the sacred ratios of geometry of which the Fibonacci summation sequence is part of. So all I do is I watch these particular patterns form and what happened to me in 2000, I happened to be living here in Tucson and the folks up at Ensign were having a seminar for the weekend up there. It was a trading seminar. They asked me if I would come up and trade for a day with them. So I said I did and when I was up there and I'm very close to the Arrington family and we hung out together and they asked me what they could do for me and I said well, I've been trying to get this thing like the wave trader for a long time but I've tried other people that tried to do these ratios for me. They couldn't do it and he says what do you want? So I showed him what I wanted to do on paper and how these ratios interconnect between ABCD and the moves down and all that stuff and he said well that doesn't seem too hard. Well, what I had paid close to $50,000 for and got nothing, they did it over the weekend and that's what you're seeing right here on this chart is. This is the Persevento patterns are doing now. The way I do it, I mean I don't use these patterns as much anymore because I've got little patterns that they built into the thing. This happens to be natural gas that we're looking at but all I do now is I take these same things. Now what you're going to be looking at now is the same chart that I was looking at before only I've taken out all of the swings other than I put the ratios on. You can see the ratios between highs and lows but the Ensign folks put a graph in there so that I can actually connect the highs and lows and make it in color just like what Bryce did for the wave trader. So I don't have a scale of 1 to 10 but I have patterns that I really believe in. Like if I see an ABCD and a three drive to a bottom pattern that tells me that that's a strong probability that this is a very low trading opportunity. Do I know it's going to work? Heck no, I don't know it's going to work but what I can do is I can determine whether this is going to be a low-risk trade or a high-risk trade. High-risk trade I have no interest in. Like yesterday in that FedEx that's what that was. It was a high-risk trade and the reason for as high-risk trade is A it's okay to trade against the trend but the big unknown there was the earnings. It would be like going into a currency or a gold or a bond right into Fed time where there might be an announcement. See that's risk off folks. You don't want to stay away from there. That's where the risk on. You don't want to be there. You want to be when risk is off where you can control it. See during these times of news announcements and earnings and Fed which is today it makes it really, really difficult to look at these things. So pay attention to how much money you have to risk now how much money you have to lose. That's the real key to this. I hope that answers Mike's question and if it doesn't you can get in touch with me in the usual way Larry Pesavento at gmail.com and we'll do it. By the way on the yesterday we were talking about the family that needed help here. I want to thank Big Bubba down there in Fair Day Louisiana a good friend and a big supporter. He asked for the contact number of the folks and made a phone call and boy oh boy did he help somebody. Anyway we'll be right back folks 877-976648. This can rise and fall like the tides. Subscribe to Basil Chapman's newsletter, the opening call and you too can ride the wave. Basil Chapman is an authority in technical analysis. His Chapman Wave trading system has been helping traders identify trends and capitalize on momentum in the markets since 1984. TFNN invites you to test Basil's proprietary Chapman Wave trading methodology with a monthly subscription to the opening call newsletter for only $149. Your subscription to the opening call comes with a 30-day money-back guarantee as well as daily market updates on key indexes, stocks and commodities. Ride the wave. Sign up for the opening call risk-free today. That's right, information. Having all the information gives us the perspective we need to place the right trades at the right time. The TAS Profile Scanner is the premier market profile based scanner. Powered by its acclaimed TAS proprietary algorithms this feature rich scanner instantly filters over 2,500 plus global financial markets such as stocks, ETFs, commodities, futures and forex. This powerful suite of tools leverages instant trade filtering and strategy formulation to show you emerging trades before they happen. For a limited time you can save $100 off your first month by using the promo code upgrade and you still get a 30-day money-back guarantee so you have nothing to risk. Level the playing field with the TAS Profile Scanner which you can find under the services tab at TFNN.com. Sign up today. Sharpening your skills as an investor is like getting better at playing a musical instrument. You have to practice, sure, but you also need excellent instruction from experts. At TFNN you'll get advice and guidance from the authority in technical market analysis and it's not just dry tedious text either. TFNN airs live financial content streamed live on TFNN.com and TFNN's YouTube channel with Tiger TV, live every market day from 8.30 a.m. to 4.00 p.m. Eastern for free. Each host is an experienced trader and gives their take on the market while taking calls and questions live from around the world. From the moment the market opens until the closing bell sounds Tiger TV has eight different shows with expert hosts to help you make the right moves with your money. Watch online at TFNN.com or on TFNN's YouTube channel and become the investor you were born to be TFNN Educating Investors. Call now toll free at 1-877-927-6648 internationally at 727-873-7618. Okay we're back folks and I wanted to go a little bit deeper about those things about the Wave Trader and the Pesavento Index that's in the Ensign program. I posted that chart of Cardano, the ADA, the crypto blockchain thing. Anyway the reason why I want to show you this is what it looked like on the Wave Trader instead of looking at wiggly lines. Each of those dotted lines were colored. In other words between the dotted lines you would see the different color patterns in that. That's why it's so very very important. Now if you'll look at those colored lines when I used to get my charts for commodity perspective you know back in the early 70s and 80s you know basically I would get these big 11 by 14 charts and I would draw those lines in between with my pencil and ruler and then when I was finished with the chart my little daughter who was about seven or eight would go in even when she was younger she would take the old chart cut it out and then she would cut the pattern with her little plastic scissors and then she would color in the little little triangles that were there. Each one would be a different color and then when she was finished with it she would take a piece of scotch tape and she would put it on the refrigerator. Well I started looking at those and the girls called them a butterfly because that's what they look like and sometimes they look like butterflies and so that's why I called it the butterfly pattern. I called it the Gartley 222 pattern because on page 222 of Gartley Book he took well over two and a half pages to describe that one particular pattern that was the only time in that 600 page book that he spent three pages describing a pattern so I figured he was trying to tell us something and certainly he was because it's the basis of what Mandelbrot talked about in fractal geometry where AB equals CD as old Mark Douglas used to say. So that's pretty much what we're looking at. The S&P question is why do the ratios work some of the time and not all the time? Folks I don't know the answer to that and frankly I don't care what the answer is because they work often but it's predictable and that's what Andrew Lowe did in his book The Non-Random Walk Down Wall Street using all those formulas. They're predictable within limits and not only are they predictable with limits the most important thing is they repeat over and over again that's what we see every day here at TFNN when we're going through some of these things. It's the same thing over and over again. That's why sometimes it seems a little boring to see but I don't know which ones are going to work and I really frankly don't care. I'm looking at the ones that basically fit up to what we're trying to see. Anyway let's talk just a little bit more about the wave trader. I have to talk to you about Bryce Gilmore because I got to know him very well during those six years and he was incredibly smart and he was certainly involved in the markets a great deal as you can imagine but he would come and stay at the house and we would have breakfast with Steve Shapiro and his mother if she would cook for us and we would have this one every Wednesday we'd have this great breakfast and that day there was a big day because he had done a lot of work on Treasury bonds and he said this is going to be a big day in Treasury bonds so we've got to get ready and then so he he was from Australia so he couldn't trade in the U.S. because at that time you couldn't do it. I don't know if you still can. Yeah I'm sure you can now but back in those days you couldn't and so I let him trade in my account and he said what do you want to do and he said well I want to sell six Treasury bonds and we'll just use the price that we've got today at 164.01 I want to sell six of them and I want to buy stop at 164.02 and I said I said Bryce I said you can't do that I said that's a stupid order I said because that's just one tick that's just one bid that's just a waste of money and he looked at me and he said let me tell you something he said I want to sell them at 164.01 and if they see 164.02 I'm going to take these fricking books of all his market books I'm going to take them out to that pier at Pacific Ocean at Pismo Beach and he said I'm going to throw them into water and I'm going down to Los Angeles buy a few exotic cars like Mustangs and I'm going back to Australia and you'll never hear or see from me again Steve and I was Steve Shapiro and I were just laughing I have to get Steve on the show to tell that story too I said you can't do it he said I want to do it I said pick up the phone and I put the order in at 164.01 and we waited for two hours it hit 164.01 that went on for a solid hour folks and I knew doing that that it had to see 164.02 at least to get those stops that had to be there so he's getting ready to play golf by now it's about 10.30 in the morning and we were on the upstairs part of the house with his little balcony there and he called down from his car he's putting his golf clubs in his thing he says how's it doing and I said well I said I got filled and I said actually it's broken a half a point which was 500 bucks on six contracts that was three grand and he said cover the position I said hey if you're strong about this big he said three grand is three grand I said okay and so I went to the machine and remember we don't have this fancy stuff I had to pick up the telephone and call in by the time I got through four ticks better and it ended up being down a point and a half on the day which was a huge move you're talking 1500 times six was 9000 he made I think he made like three grand and he could have made 9000 so we go to early dinner that night around five o'clock we had guests coming in from Chicago so we went to our favorite steak place I never mentioned it not during the whole time and the reason why I knew if I did that was going to put a scrawl on his face so the next morning I'm in the trading room and he's up really early and he said hey why didn't you tell me about that the fill in the treasury bonds while we were at dinner and I said hey I said you had a great trade there and I said I didn't want to spoil it or anything and I said Daniel was right and I had to say this time I said do you know what the high in the bonds were today Bryce and he said no I said 164.02 and he would have been stopped out and I didn't put the stop in because I thought that was stupid and so anyway it turned out to be okay we laughed about it and everything so that's neither here to there hopefully we're going to have Jeff huge on it to break here I want to share a really great chart here about the economy and technical stuff that I don't understand and that is you'll look here this is a palladium going back many many years more than 20 years you can see the relationship between the stock market the candlestick chart is the palladium the blue line is the New York Stock Exchange index and you can see they peak and move very very closely and you can see the big move we've had here look at the big drop we've had in palladium here this past two months so that's telling you that there's something not quite right this chart comes from our good friend Jim Bartolioni who's going to be our guest here in a couple weeks and he's always fun to talk about he's one of the the F-18 pilots from the Navy that I was able to train over the years we're going to take a little break here hopefully we're going to have Jeff huge of alpha insights tomorrow I'm trying to get Stan Harley to come back he's been just swamped with all the volatile that we're having this week and of course Friday we will have Tim Boston so that'll be good so that'll be a lot of fun also so that's what we're looking at here today folks be right back after this break with Jeff huge of alpha insights are you having fun trading the markets but having trouble finding like-minded individuals to discuss your trading and investment ideas with become an apex predator in the trading markets and join the Tiger's Den trading room only at tfnn.com the Tiger's Den is an exclusive trading room where successful traders from around the world come to exchange trades and ideas join the den and surround yourself with the sharpest minds in the trading world subscribers to the Tiger's Den are also the first to have their questions answered live on air and can privately chat with our tfnn hosts live during their shows interact with other tigers and tigers as they share 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charting software that will even give you a 30 day unconditional money back guarantee don't miss out on this incredible new piece of software get your copy of the art of timing the trade charts today by visiting tfnn.com Okay we're back folks and we're chatting with Jeff Hughes of Alpha Insights Jeff how are you? Hey I'm terrific Larry how are you? Very good Jeff I did not get any charts to post did I miss something? Well I sent you my weekly I think probably on Sunday Oh yeah I got that can I get that at www trade exchange or which which is the best place to do it? Well I sent it to your email on Sunday night. Yeah yeah I could resend it right now if you want. No I've got it I've got it I've got it I'll just get it up here and I will be able to be able to figure out which ones you want to show because well yeah Shucks I yeah I don't know which ones to show now I might be in a difficult place because I I don't have a a whole great technical stuff in my skills are very very limited why don't you just take the first few minutes here take the first 5 minutes or so 10 minutes and tell the folks what you're seeing in the market in general then we'll look at the charts when we come up to the first break how's that because what you've shown us over the months has just been too important not to post so tell us what you're looking at here Jeff. Absolutely so Larry you know we have been tactically bearish on the market since early August we were a couple of weeks too early the market S&P 500 that is actually peaked on September 2nd the Dow actually peaked on August 16th and then of course the Nasdaq index is peaked on the 7th one of the things that I think is interesting is you know part of the bull case has been all the cash on the sidelines about four and a half trillion dollars sitting in money market funds right and we saw data going into September that confirmed that and then heard through our sources that a great deal of that cash on the sidelines had been drawn down in the first week of September and deployed into equities which I think was interesting because you saw that price action reflected and we saw the markets rally into those highs and then of course the second week of September we started to see some sell off and then that follow through on Monday was fairly dramatic taking out the 50 day moving average for the first time definitively on a daily closing basis and then actually trading all the way down to the 100 day moving average and holding that level pretty steadily and rallying sharply off that through today's price action now our view at this point is that this rally is a counter trend rally and that we've actually put in atop and one of the reasons we believe that is because we've identified a very common pattern that evolves at the very terminal stage of a trend it's known as an ending diagonal triangle it's an Elliott wave formation and once that ending diagonal triangle was resolved to the downside in other words we've peaked at the top of the upper boundary and broken down through the lower boundary convincingly which we certainly have then it confirms a trend reversal and so the only real question on our mind at this point is what magnitude of the decline should we expect is this a and what degree of trend did we top at top at cycle wave degree or did we top at primary wave degree or did we top at intermediate term wave degree and so you know right now we are always focused on the worst case just to defend capital and so we're assuming we've seen at least the cycle degree and that we have a fairly significant downside to look forward to now the best case scenario would be that this is you know your garden variety corrections something in the neighborhood of around 10% which would bring us all the way back down to about the 200 day moving average which we haven't seen for almost a year and a half now so it's about due and if we did get that pull back to say around the 4,000 level on the S&P 500 we could then as long as it holds obviously we could then project upside to around 5,000 on the S&P but that that's kind of our alternate view our preferred view at this point is that we've topped and that this is going to be something way more significant at least a 20% correction and that would take us down into kind of the 3,600 range but more importantly we think this could be something in the neighborhood of about a 50% retracement of the entire bull market advance off the 2009 low so that 12 year bull market advance and if we saw a 50% retracement that would bring us down into around the 2,600 range on the S&P 500 2,600 they're going to be checking a few compasses at the old geometry room if that happens for heaven's sakes wow that is really I could see that very very easily just because just looking at what's happening with the type of people they're in the market I have nothing against Robin Hood or Reddit or any of these things but these are the same type of people that I can remember back in the dot com bubble if you remember Jeff where if the phone rang on the desk there was a potential sale the stock would jump 25% we're seeing not quite that dramatic but it's still very very dramatic on the straight up move that we've had so far here now we have we have got two more minutes before the next break but we've got a couple of questions here that I would like to bring to your attention that some listeners have asked about is what is you have several levels of service can you tell us what your basic service is and what you offer because you're a real professional so tell the folks what you give people happy to yeah so we publish something called alpha insights which is our I would call it a chart compendium but we publish review and outlook every month so it's a big 100 page chart compendium that looks at all global markets US, Europe, Asia we also cover commodities currencies crypto and rates we do security selection we do sector rotation we do country rotation so you know we have a variety of different sort of models that we publish in this monthly publication and then every week we publish what we call the weekly playbook for alpha insights and that really takes kind of a more shorter term look at what's changed between the monthly publication so what our things evolving week to week and then we try and refresh our top ideas less every week so typically when we're in a situation like we've been in in recent weeks where things are very choppy we'll publish a list of long and short ideas for investors to consider and we typically use you know visualization techniques that you know focus on quantitative and technical analysis so in other words we're going to present you with a chart that gives you our bull case or bear case on stock and we're going to give you specific levels profit targets and stop loss levels typically using at least a three to one risk reward ratio so that you can make at least three times as much as you're risking our track records pretty good on this I'm not going to quote any numbers but you know that's the basic service we charge twelve hundred dollars annually for that so basically a hundred bucks a month for individual investors we have a higher level of service for professional investors that involves you know having direct access to us and we do some customized portfolio analysis and things of that nature for those clients so that would be the differentiation okay now the second question is what are some of the technical programs that you use for developing do you cycle programs and what other charting tools that you use that if you can't answer it on this before the break please remember the question but can you offhand tell us some of the programs you're looking at to put all this data together our work is built off of relative strength for the most part so we look at price first momentum second relative strength third and what we're really focused on in terms of our stock selection is looking at the momentum of relative strength so the momentum of momentum if you will we also overlay Elliott wave to create a roadmap when we're looking at things on a longer term horizon oh well that's really good well we've got a break coming up here Jeff and when we come back we will uh we'll chat with you tomorrow okay could you send me the charts please if you could sure absolutely we'll be right back folks Jeff use alpha insights very interesting are you in the market for buying or selling real estate in the Bay Area including the surrounding St. Petersburg Tampa and Clearwater markets Tiger real estate LLC is a firm that has extensive experience in the Tampa Bay area whether you're looking to sell your current property for maximum value or you're in the market for a second from home or investment property Tiger Realty has the experience across all areas of real estate in the Tampa Bay area to help buyers and sellers make the most informed decisions across all price levels from the price you should be paying per square foot in certain up and coming areas to the type of cash flow investment properties are capable of creating Tiger Real Estate can help you make the best decision when it comes to all areas of the market before you make one of the biggest decisions of your financial future call Tiger LLC today at 727-329-8322 or email us at tiger at tfnn.com that's 727-329-8322 call us today technology around us is changing every day with so much happening it can seem impossible to keep up with all the information David White's investment newsletter the technology insider is designed to give you all the information you need to understand the technology that shapes today's markets for tomorrow's future David White has made his living staying on the cutting edge of technology his weekly newsletter will give you specific recommendations for valued tech stocks as well as entry prices, target prices and stops to set for each trade Dave delivers his weekly newsletters every Friday with updates throughout the week you can get the technology insider at tfnn.com for only $37.50 sign up for David's newsletter the technology insider and get an inside look at everything the technology sector has to offer try it risk free today with our 30-day money back guarantee tfnn educating investors are China A shares 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hit watch tiger tv okay we're back folks unfortunately Jeff was nice enough to send the charge to me that he was talking about in his letter we talk a little bit about the second chart about how the fed is putting money into the system I think the folks would like to hear your description of what's going on on how they make it accommodative well what's happening out there is the fed is basically buying assets and they're buying about 80 billion dollars worth of treasury bonds and bills every single month and they're also buying another 40 billion dollars worth of mortgage backed securities so they have been building up this treasure trove to about 8.5 trillion dollars on their balance sheet at this point now this is obviously a sharp change from kind of the pre great financial crisis period going back to say mid 2008 and you know the move from about a trillion dollars to on our way to 9 trillion seems like it's something that is unsustainable and the first evidence of that is the fact that the feds already indicated at their Jackson Hole symposium that they do intend to begin tapering off those asset purchases and we're going to find out today at 2 o'clock eastern time kind of the timeline for that hopefully so most analysts and economists out there are focused in on November start date so sometime in November the fed should probably begin tapering off those buys so instead of buying you know 120 billion dollars every single month that might slip down to maybe 108 billion in November and then it might drop into something under 100 billion in December and you know gradually get back down to zero so that they're no longer quantitative easing Oh wow that'll make a big difference I would think in people's perceptions anyway well it's been one of the main you know legs in the stool of the bull market I think this this accommodative you know high liquidity environment has really created the money necessary to go into stocks and I think once they shut off the spigot or at least you know dial it back it's going to have an impact certainly on the rate of change in equities okay now the next slide that's really interesting to me is that's money on the sidelines you want to explain to the folks what this chart's about yeah like I said this is about four and a half trillion dollars that is in money market funds going into the month of September so you know we've seen quite a drawdown on that in the first week of September estimates now are that it's probably sub four trillion but you know a lot of people are focused on the absolute dollar value the real thing to focus on is the percentage of market cap and so you know at around four trillion dollars versus fifty two trillion dollars in total market cap in the U.S. you're really looking at something you know around seven percent the all-time record low is about five percent so it's not a really high percentage of market cap in fact you look back to 2009 we had about that same of you know amount of cash on the sidelines around four trillion but the market cap of the S&P 500 back then was only about twenty trillion so you know as a percentage it was much much higher is about twenty percent but now we're down to around seven percent it's really not a substantial a driver of stock performance as it was many years ago well now the next one that's one of my all-time favorites because I happen to know Richard Russell and that's about the Dow theory and you have a two great charts here on the Dow Jones industrial average and the transportation and how they're diverging do you want to tell the folks your theory behind this yeah so this is one of the you know long standing classic theories discipline of technical analysis is that really the key intermarket indexes and sectors should advance together and confirm one another's progress during a bull market phase by simply making new all-time eyes and near synchronicity so there's really no intermarket relationship that's deemed to be more important than that between the Dow Jones industrial and Dow Jones transports and just by way of background Charles Dow who's the founder of the Wall Street Journal back in 1889 he famously observed that the industrials when they were engaged in some form of sustained advance making new new highs the transports would confirm you know the bullish trend by also making new highs but when the transports failed to make new highs along with the industrials the bull trend tended to fail as well and so Dow really deduced that the producers of goods as they were experiencing increase in demand that the transporters of those goods should also be seeing an increase in demand and that the market would then reflect those underlying fundamentals in its pricing of stocks and so the thing that we're seeing here in this chart is that the two have been out of sync since May 10th. Wow that's good. Now finally the last one is my favorite that's the advanced decline line to me this really means a lot and you want to tell the folks here how that's looking right now in fact it's looking worse and worse all the time it looks like. It is it's much worse today than it was when I printed this chart out on Sunday night which was based on last Friday data but the advanced decline line represents the cumulative number of advancing issues on the NYSE there's two here there's there's the all issues which also includes preferred stocks and closed-end funds and really all manner of bond like proxies and then there's also the common stocks only version on the lower panel of the chart and that actually only includes New York stock exchange listed common stocks and historically the AD line has tended to confirm a bullish advance in prices by posting its own new high again very nearest in synchronicity with the stock index prices and the failure to do so which is otherwise known as a negative divergence and that's what we're seeing today has almost always been followed by a trend reversal of varying degrees of magnitude in the subsequent months and so you know it's probably considered to be one of the most successful warning signals in terms of its reliability of predicting a bear market so you know the S&P again made its all-time high on September 2nd and the all-issue AD line actually made its all-time high back on July 2nd and has failed to confirm the latest high and then of course the all issue or I should say the common stocks only version topped back in June June 8th to be exact so both versions are now trading below the respective 50-day moving averages as well which is a very bearish signal. Wow this is great Jeff I want to thank you for being our guest we'll have you on in a few weeks but may God bless and keep up the fabulous work my friend it's as good as it gets and I think all the folks should take advantage of it. Thank you so much for joining Jeff Hughes of Alpha Insights folks. Thanks Larry. You bet buddy and we'll be right back folks after a message from our sponsors. Every market day from 8 30 a.m. to 4 p.m. Eastern for free each host is an experienced trader and gives their take on the market while taking calls and questions live from around the world from the moment the market opens until the closing bell sounds Tiger TV has eight different shows with expert hosts to help you make the right moves with your money. 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