Leading Indicators

I'm going to post a 2 part market update so intraday charts are not old by the time I get them up.

So far the market and even the USD/JPY look less like they just got the gift that keeps on giving and a bit more like the realization that #1) the controversial Bank of Japan (BOJ) vote (controversial not just for other countries, namely China, but the US, Europe and Germany in particular-Europe's manufacturing powerhouse as well as the Japanese people who will feel more suffering under a consumer crunch and loss of buying power, but controversial inside the BOJ itself that narrowly passed the measure with a 5 to 4 vote) is much more about Hundreds of billions of dollars (in Yen a lot more) of JGBs (Japanese Bonds) being sold in to a bid-less, illiquid market. As previously noted last week, the Japanese bond market over the last year has lost all liquidity and is akin virtually to a stocks that trades 5k shares a day on average with several consecutive days having passed in which not a single trade occurred. Imagine what happens to the holders of Japanese bonds (not just the pension fund, but retirees, those saving for retirement, institutional funds, etc) when the GPIF changes allocation from primarily JGB's (60%) to a minority holding of JGB's (35%) and tries to dump those holdings in to a market that sometimes doesn't see a single trade in a day.

The more analysis I read about this decision, the more it seems like Shinzo Abe and the BOJ's Kuroda have committed to either beating the Japanese deflation monster (although there are obviously other reasons the decision was taken-JGBs from the GPIF) or facing the increasingly more likely outcome of a failed state. It also seems the Japanese people are so fed up with the suffering inflicted either by Abe in the form of sales tax or the debasement of the Yen by the BOJ, that it's unlikely Abe will survive the next elections, thus whoever inherits the unwind (like Yellen did from Bernanke) will face a nearly impossible task as Kurooda cavalierly dismisses the difficulty of policy normalization with a single sentence.

We'll see how it plays out, but I wrote about this years ago when they introduced QE-Zilla and the signs of it failing were there then, I still have the posts linked at the top right of the member's site under "A Currency Crisis" , which years later this appears to have blossomed in to and just getting started, nearing all out currency war.

As for Leading Indicators...

 VXX Short Term VIX Futures for a 4th day over the last week have outperformed the SPX (green), until on an intraday whack-a-Vix, the VIX was smashed lower to pump the SPX, this is odd behavior as this is usually seen at the close just like last Friday.

 Spot VIX was knocked lower as well, it didn't respond as badly and it has outperformed all day long including at the attempt to crush VIX and ramp the SPX, if VIX was moving as its normal correlation suggests, it would be below the white arrow (VIX in blue).

Not only did we see strong VIX futures accumulation last week, but as most who don't have the tools we have, they see the outperformance or the bid in VIX futures via the outperformance correlation.

Professional sentiment not only led the move to the upside as the SPX was making new cycle lows in mid October, but moved up tick for tick during the mark up stage, this negative correlation/divergence vs SPX (green) is intraday, the pros are doing something else.

 And on a longer term basis, there's a break in the correlation right about where they started using HYG as it looks like the pros had enough of the move and were getting uncomfortable with risk any higher.

Our second pro sentiment indicator shows the same both intraday, a near sell off among pros vs the SPX and also longer term as well.

As can be seen above, but the notable move is the last day or two.

HYG intraday (blue) still below Friday's close and divergent vs the SPX, this after a negative divegrence around Wednesday last week warning of lower HYG prices which warn of lower market prices.

 HYG vs the SPX at each major top pivot, note how HYG clearly goes negative vs the SPX before the SPX moves lower. The most recent divegrence is the sharpest by far, it's simply harder to see until it is complete, but look at the relative value at all 3 tops in the SPX and the relative value of HYG at the same areas, not to mention the divergences there.

 HY credit which is not manipulated like HYG as it is not liquid enough to be a ramping lever, has also broken lose from the SPX's correlation, another indicator that led the market to the upside as we were making new lows.

Our SPX/RUT Inversion which is way out of sync big picture and intraday as seen above, the VIX Term Structure is back below inversion, this is what told us it would be a stronger or more impressive rally than the early August, otherwise it has been back below a buy since about the 16th or so.

This is the 1 min USD/JPY, no major divergence, but price has obviously mellowed from early this morning.

I have mentioned many times over the past several weeks the negative divergences in the $USD, in fact the week before it broke its 12 week consecutive win as the F_E_D was becoming increasingly concerned, it's still there and a lower $USD means a lower USD/JPY.

30 min $USDX

While the 30 min Yen is in confirmation mode longer term, but starting to change.

$USDX 7 min is negative implying losses in the $USD to come, how I don't know and this is where the Yen starts acting up.

The Yen with its first serious short term 7 min positive divergence, remember that new divergences always start on the shortest timeframes and work out.

Yen gains would send USD/JP Y lower just like $USD losses, both at the same time would do more damage.

Yen intraday positive

 $USDX intraday negative

And some strange dislocations between the USD/JPY and ES (purple), they started seeing ES correlate and follow the pair at the start of pre-market at 8 a.m. today, ES was weak at the USD/JPY's intraday high and vice versa right now.

More to follow...

UNG Broader Update

The most recent chapter in UNG really started September 29th when UNG was trying to break-out of a range,

This is an end of day chart of Sept. 29th, however at the time we were covering it, UNG was trading near the intraday highs.

Earlier in the day the following was posted...

"Our UGAZ long is up +19.32 % and it's making a breakout move today which needs to see volume pick up and hopefully some follow through so I suspect we'll know a bit more about this move of  over 3% in UNg today , by the end of the trading day, again look for the breakout to hold and increasing volume which we saw on the breakout intraday."

I have very little doubt that this was a sincere effort to breakout of the range, sometimes it just doesn't happen and I've covered this range topic several times over the past couple of weeks as it's a common recurring theme in how a stock will respond, or you might say a "Concept".

Also from the same post on Sept. 29th...

"I'd say a downside head fake/stop run below support would be extremely high probability, I simply had no evidence that this was any probability as of the 24th and still don't unless this breakout fails, then it might start showing signals with some probability"

As you see above, UNG did NOT have a strong close on the day, it barely broke out and lost the intraday highs rather than closing at them. Although there's no name for this type of candle, the point of candlestick charting is to get a quick visual representation of what happened during the day and what it means going forward; a candlestick (especially at a strong resistance area) with a longer upper wick means that higher prices during the day were rejected, this is not what you want to see on a breakout attempt. As to the higher volume, this is one of several reasons I believe it was a sincere attempt to breakout, volume had swelled earlier in the day as intraday prices broke above resistance, however as sellers stepped up and the breakout looks weak, volume tends to increase creating a mini churning event, often followed by a reversal (to the downside).

One of the recent examples I have mentioned was XLF/FAZ, although a different situation and different direction, the theme was the same.

This is XLF / Financials, I had opened a partial FAZ (3x short Financials) trading position in the range at #1 which lasted nearly 2 months, during that time I had been waiting on a head fake move ABOVE the range to add the rest of the 3x short financial position, FAZ. As it looked more and more like XLF didn't have the ability to make the head fake move above the range, I suspected a downside head fake move as these moved are largely about gathering momentum. 

At #2 on the first solid break below the range and with FAZ at a profit, most technical traders would be shorting XLF and buying FAZ, instead I closed FAZ as it broke below on 8/1 Closing FAZ Long.

I didn't leave anything on the table as you see XLF broke down and made no lower closes of any substance, rather this was a head fake move which allowed for accumulation as stops were hit and new shorts entered (providing supply) and ultimately sending XLF ABOVE the range which it couldn't do on its own without creating a bear trap for upside momentum (short squeeze). I added back the entire FAZ long (3x short XLF/Financials) after the breakout I had been waiting on at #4 and took gains on the break lower at #5.

While UNG is in a different situation, the concept of using a head fake move to achieve what the stock couldn't on its own is quite common.

Also from the Sept. 29th UNG post...

"I'm not worried about UNg/UGAZ, if it fails here, I have little doubt it will make the breakout, although I'd rather see it just make it here of course...."

Some concerns intraday for the breakout attempt...

"There is profit taking on the move as it is very parabolic which I wish it weren't, as impressive as they look, I don't trust parabolic move, hopefully that fades a bit and we get a few intraday pullbacks creating some support and shaking loose the weak hands."

As we already know UNG failed at the breakout, failed moves and failed parabolic moves (which is most often the case), make for fast reversals in the opposite direction and starting the same concept seen above in XLF (the FAZ trade)...

While this is an opposite trend, the concept of a failed breakout, a fast reversal and building momentum below range support, is what the broader concept is all about and as I stated Sept. 29th,

"I'm not worried about UNg/UGAZ, if it fails here, I have little doubt it will make the breakout, although I'd rather see it just make it here of course...."

Since all of this has occurred, we'd expect to see the move under the range accumulate, build momentum which is one of the primary reasons for head fake trades, whether the larger 2 step head fake in XLF or what's occurring in UNG/UGAZ right now.

Here are the charts since the break under the range,  price is rarely what it seems, a lesson I learned acutely back when I had trade department research and found it was useless near term as it was working on a much broader picture which was right on,  a simple matter of expecting smart money to build and deconstruct positions the same as we do which they cannot because of size.

 The positive 15 min divergence at #1 is one reason I believe the attempted breakout at the "white/red" arrow was legitimate, just failed and the divergence at #2 is an extension of #1, making it that much larger, it's the head fake area or short squeeze/bear trap, a momentum building area.

Since the downturn before the range which we had expected (going back to some longer charts), UNG has been in pretty good shape as far as longer term divergences and is still one of the few assets I believe can enter a secular bull market despite the broad market.

 This is the 3x leveraged UGAZ long position and its leading positive divergence.

As far as near term, we have a pretty significant gap today, it would be better if it were filled, probabilities over the last several years would say it will be filled and the 5 min chart is positive with regard to the reversal, but neutral here.

This is the gap on a 3 min UNG chart which is not confirming so I think a gap fill is a high probability.

For those interested in UNG or UGAZ long, a pullback with accumulation would be a high probability/low risk entry.

Using the 60 min X-OVer chart you can see where we had a sell/short signal which was pretty effective and when that ended and created a cover/buy signal (white arrows). Typically the first pullback after a new signal is to the yellow 10-bar moving average, at least on a daily X-over chart, on a 60 min I give it more room and would expect a pullback or at least not be surprised to see a pullback to the blue 22 bar moving average.

In addition to accumulation in to the pullback, I'd also like to see the X-Over signals maintain a positive bias.

The Daily Trend Channel can be used to set a stop and define risk, right now it's just under $20 (although I'd never put a stop at a whole number like $20). It should move up a bit more from here, depending on how long a pullback takes so I'll check it again on a pullback signal and see where the stop is, this is on a closing basis.

This would be a high probability/low risk trade entry as UNG is still very low in the larger base, the pullback would allow for verification of accumulation and the stop is very close.

Morning Market Update

Again as a reminder, there were two things about Friday I had connected with the charts and expectations for Monday's open, strange as it was being algos DID NOT ramp Index futures with USD/JPY, but only around 8 a.m. in to pre-market trading, which is one thing I had mentioned Friday in the Week Ahead and the end of day posts as well as the end of the Fiscal year for Mutual Funds at the close of October 31st, this is important to show performance for prospective new clients (prospectus).

After the close Friday in the "Now and Then" post, as most of you know I don't believe in markets looking exactly the same and often shoot down charts showing these kinds of correlations as they have popped up over the year, even when I agree with the general statement they are making. However there are broad generalities about topping action and those can be seen between 2007 and now, one thing is the increased amount of volatility and unpredictability which was evident in to the 2007 top. Now like then, it was nearly impossible for people to imagine the market rallying in mid-October, probably much less so that it would make any kind of move to this extent, but as with all bear market rallies (even though this is not technically a bear market rally, I think the sentiment was and now is exactly the same) and this is why I warned about it in the "Anchoring expectations" posts so many times BEFORE the market moved up even a single day, they MUST be convincing, that means they must be extreme and this can be seen back in 1929 after the initial sharp break down in the market followed by what then was not a bear market then either, but a bear market-like rally that lasted 5 months with a +50% gain, a lot less than the current 8+% gain of the October move. The other is the break down of market breadth or rather than the stock market, "The market of stocks", which isn't repaired to any significant degree even with a monster rally or all time new highs.

I'm not claiming any smoking guns this early in the day, but there are some moves that are expected and seeing them is not surprising which we'll get to.

 Often with Hanging Man candlesticks (also remember Friday's post of the major averages with Monthly Hanging men and bearish Evening Doji Stars), the confirmation candle on the following day is often a bearish engulfing pattern, which  necessitates a gap higher on the open, that's the bull trap talked about Friday as it related to late n the day trade and that sentiment carrying over the weekend to limit orders and orders placed by those who can't watch the market during the day due to regular jobs).

The completion of a bearish engulfing pattern would be a close lower than Friday's close in the SPY's case.

 In the DIA's case, because the Evening Doji Star opened lower and closed higher, a bearish engulfing candle would need to close below Friday's open.

 This is the Custom NYSE TICK indicator vs the SPY, the "X" represents the NYSE blackout last week, the TICK data in between that and the yellow trendlines is Friday and the yellow lines is today, TICK is much less volatile today thus far.

 The late day divergence Friday in the SPY looked like a close higher, not only for the weekend warrior's orders, but probably more so for the closing of Mutual Funds' year on Oct. 31.

 However the 5 min trend which is long enough that the NYSE blackout isn't going to significantly alter any of the signals is still quite ugly here.

The QQQ 1 min trend is similar and I can use the 1 min here as there was no blackout in QQQ, unlike SPY, DIA and IWM.

 And the QQQ 5 min trend like the SPY 5 min above. Rather than draw the divegrence which should be easily seen, I drew kind of a divergence meter, or roughly how much influence the divergence is carrying as it strengthens in to Friday.

 IWM 2 min has an odd chart as well, a very sharp leading negative through Friday which I can use even as a short term timeframe with the blackout because the divegrence is after the blackout and the blackout has no effect at all on it.

The IWM 3 min is very similar, very sharp in to Friday.

Transports which have been mosterously strong show the same kind of activity (also a 5 min chart) with the divergence strength below.

And Bio-techs which have been strong, you might see why I didn't ignore the signals and took action in bios last week (Thursday).

 HYG, about a week ago was showing a positive 1 and 2 mi divergence, not to 3 min charts though, at the time I said that this "concerned me" a little, that divergence started falling apart last week,  HYG is used quite often as a lever to ramp the market, but typically for brief moments as the trend in HY Credit is very ugly.

This is HYG in red during its divergence vs the SPY, it did lend support, even if that is just keeping HYG from causing trouble by leading lower as it has had an excellent track record of leading stocks/the market.

However it wasn't just that, HYG was with the market intraday, even if not on a larger week long basis.

HYG red vs the SPY intraday, that's why last week's negative divegrence or end of the positive was interesting and why this morning's move down in HYG is also interesting, it has a very strong ability to lead, which is partly in the short term and largely in the longer run due to arbitrage factors as both assets are arbitrageable. Credit is also considered a much better informed market, hence the Wall St. maxim "Credit leads, stocks follow."

I'm still gathering information to see what the market's reaction to the BOJ's decision is, the initial knee jerk is an emotional response, the days after is when the smoke clears and a clear response or front running is often found.

Currency Volatility... Currency Wars 2.0

If anything was abundantly clear overnight it was that currencies have become exceptionally volatile since just last week, but have been more and more volatile going in to last week.

First overnight the AUD got hit hard around 7:30 p.m. EDT, then on no news whatsoever, the Euro took out sell stops right at $1.2500 sending the Euro plummeting lower, well ahead of the lackluster European PMIs out this morning; followed by Yen weakness around 5:15 a.m. sending USD/JPY nearly parabolic.

 After the $AUD crash just about an hour earlier as Futures/currencies opened for the new week, the EUR dropped on no news, simply  a tripping of sell stops at the psychological level of $1.25 and breaking under Friday's support, then retracing overnight/a.m.

The Yen saw additional weakness around 5:15 a.m., but the USD/JPY took off  around 2 a.m. with a parabolic move around the 5:15 mark,making a new multi year high Strangely the Index USD/JPY momentum chasing algos did nothing about it and Futures sat flat.

However as mentioned Friday, the late day surge , after the market had drifted lower from the open most of the day seemed to be linked to two things, 1) the fiscal end of the year for most mutual funds, of course they want to finish on the best foot possible and 2) over the weekend the higher close and stronger looking close to the week and Friday would brew over the weekend causing limit orders to come in to the market, chasing momentum by traders who work a traditional 9-5 and can't place orders an other time than pre or post normal cash market hours.

And as if out of no where on no news whatsoever, around 8 a.m. Index Futures which had been building a positive divegrence as you might suspect if you suspected what we suspected Friday toward the close for early trade today (specifically scenario #2 above), Index futures finally tried to play catch up with the USD/JPY...

USD/JPY (candlesticks) and ES in purple finally making a move in to pre-market.

Asian markets were split overnight, Shanghai was up +.41% with the Hang Seng down -.34% and the Nikkei closed for a holiday.

Europe was red from the open, at last check the FTSE -.47, the DAX -.32% and CAC 40 -0.40%

China PMI manufacturing printed disappointing at a 5 month low at 50.8 on consensus of 51.2  (previous 51.1) and don't forget how last week's BOJ devaluation of the Yen will effect the Chinese economy negatively or more negatively than it already has. Historically y this has led to antagonistic behavior from China in the form of military conflict, so keep an eye out for that in coming days and weeks.

Both New Orders and New Exports were down for China which isn't surprising given the fall in US imports and weakening Consumer demand.

Then came the Euro PMIs (manufacturing) which were not impressive. Both the Eurozone and Germany (another country expected to suffer under the BOJ's latest decision)  both missed expectations while France remained in contractionary territory with a 48.5 print (anything below 50 is contraction).

The 80 trillion a month the BOJ plans to buy is roughly 15-20% of what the F_E_D was doing at its height. There's a debate as to whether this puts pressure on or takes pressure off the ECB with a meeting this Thursday. The consensus thus far is that it pressures the ECB, although after a lot of reading, few doubt the ECB will do anything much more than reiterate their commitment to using non-standard policy tools if needed. If the ECB does do anything (according to market consensus) it wouldn't be until at least the December meeting and that likely would only be a hint that they may do something as consensus for any such action would need to be solidified. Watch out for the ECB meeting Thursday.

The F_E_D has already sent the ECB a message as the Euro dropped at 2 p.m. on the F_O_M_C announcement that the F_E_D not only noticed the drop, but not to push things too far, sounding a lot like a veiled threat of a start-up of currency wars should the ECB try to engage in QE or larger asset purchases. Remember ow concerned the F_O_M_C was at the September meeting with a strong $USD hampering global growth, or at least that was that party line (within the Minutes released).

In the US we have mid-term election results Wednesday. Although conventional thinking is the Republicans take the Senate, a divided result should introduce more volatility in to the market with the Republicans taking control essentially priced in.

Also as far as US data we have Payrolls Friday.

The dynamic of weakening a Euro and certainly a weakening Yen should make for some very interesting and volatile currency markets through the rest of the year, again remember the F_O_M_C's nearly chief concern at the September meeting according to the minutes was a strong $USD and a weaker Yen/Euro causes a stronger $USD.

As for this morning's open, this was the expectation in last Friday's "The Week Ahead", however the next day or so will be important in gathering data to see what the market's reaction truly is to the BOJ's decision in the near term and the long term. As mentioned last week, conventional thinking would have expected the market to pop higher on Sept. 19th 2012 when QE3 was introduced, however our signals said no it wouldn't, even as that was one of the most emotionally pressuring moments in which I just wanted to close any short and buy all longs, we held for several days as the signals were correct and the market went no where, they continued to deteriorate and the market lost 8% with the initial QE announcement knee jerk putting in the highs that day in September that weren't revisited until 2013.

Now the algos caught up to USD/JPY it will be interesting as this was the open I suspected, in fact I was a bit puzzled overnight when I kept checking futures and seeing them down, however delayed though, the algo's finally kicked in and I believe that is on limit orders.

Lets see where we go from here, specifically for the later part of today and beyond.

Now and Then

Just poking around through the pilings that hold up the whole pier and some things looked familiar like the sharp sell off followed by a sharp "V" shaped rally, so I took a bit of a closer look with breadth indicators. Remember, these indicators are not even as subjective as MACD or RSI, these are the pure count, the actual percentage of stocks doing a particular thing, there's no interpretation, there's nothing but objectivity.

There are certain reasons price patterns and markets behave in similar fashion, while History may not repeat, it does rhyme and that's because of human emotions, even the HFT/Algos which are programmed, turned on and off and reprogrammed by humans.

I'll keep this simple , just pay attention to the name of the indicator and where it's at. All comparisons are against the S&P-500 in red, the actual indicator is in green. The rest is pretty self explanatory.

First what time period are we looking at?

 The very top of the 2007 SPX bull market , ironically on October 12th, very close to where we are today, 10/31. The first decline was -9.43% followed by a sharp "V" shaped rally to a new high on 10/12 of +11.26% followed by another decline of -10.09%

 This is what happened after that time period, 10/12/2007 in white with a >55% decline, to put that in to context...

This was the previous bull market lows to highs over a 4+ year period, the rally actually started March 17 2003, similar to this market's start on March 9th 2009. As you can see, it took about a year and a half to tear down nearly 5 years of bull market work.

Our last sharp decline that sent sentiment so south was -7.34%, less than the initial -9.34% in 2007. The rally of the "V" bottom so far is +8.34% vs the "V" shaped rally back then in to the top of +11.26% so volatility was actually a bit greater in 2007 at least until this point. Now the indicators.

 The NASDAQ Composite's (red) Advance/Decline line in 2007 (green)

The NASDAQ Composite's A/D line now.

 McClellan Summation Index vs the SPX (red) in 2007 @ 617

McClellan Summation Index vs the SPX (red) now at -1600, much worse. 

 The Percentage of All NYSE Stocks Trading Above Their 40-Day Moving Average in 2007, seeing a sharp drop below 20 after a negative divegrence, then on the rally breadth improved and the indicator read 73.71% as the SPX made a slight new high (SPX in red).

The Percentage of All NYSE Stocks Trading Above Their 40-Day Moving Average NOW vs the SPX in red. Likewise we saw a sharp drop below 20% and the most recent reading as of today is +63%, 10% below the 2007 reading at virtually the same place in the move.

 The Percentage of All NYSE Stocks Trading Above Their 200-Day Moving Average vs the SPX in 2007 with a reading on the rally of 51.40%

The Percentage of All NYSE Stocks Trading Above Their 200-Day Moving Average vs the SPX NOW with a similar slight new SPX high and a reading virtually the same at 53.46%.

 The Percentage of All NYSE Stocks Trading ONE Standard Deviation Above Their 40-Day Moving Average vs the SPX in 2007 with a sharper recovery to 56.58%

  The Percentage of All NYSE Stocks Trading ONE Standard Deviation Above Their 40-Day Moving Average vs the SPX NOW at 44%

 The Percentage of All NYSE Stocks Trading ONE Standard Deviation Above Their 200-Day Moving Average vs the SPX in 2007 at 36.7%

And  The Percentage of All NYSE Stocks Trading ONE Standard Deviation Above Their 200-Day Moving Average vs the SPX NOW falling short at 34.96%

  The Percentage of All NYSE Stocks Trading TWO Standard Deviations Above Their 40-Day Moving Average (momentum stocks) vs the SPX in 2007 with a recovery rally high of between 19 and 32%.

   The Percentage of All NYSE Stocks Trading TWO Standard Deviations Above Their 40-Day Moving Average (momentum stocks) vs the SPX NOW with a recovery high of 24.83%

   The Percentage of All NYSE Stocks Trading TWO Standard Deviations Above Their 200-Day Moving Average (momentum stocks) vs the SPX in 2007 @ 20.64% and...

   The Percentage of All NYSE Stocks Trading TWO Standard Deviations Above Their 200-Day Moving Average (momentum stocks) vs the SPX NOW at 15.64%

The similarities which are very uncommon are striking, you saw what happened to the SPX next after the pilings that hold up the pier rotted from beneath the market.

A few bonus charts...

 That HYG positive divegrence from earlier in the week I was a little concerned about and its sharp decline to negative

Today being October 31st is the day in which most MUYUAL Funds end their fiscal year and prepare their prospectus to show performance for new customers, today was the last day and it seemed that they were pushing for the best close at the close because the market traded lower from the open most of the day until the end of day when the VIX was whacked after outperforming all day, an obvious attempt to ramp the market, however HYG which would have been useful decided to keep selling off in to today's close.

 QQQ institutional timeframe of 5 min from the rally's start.

QQQ 10 min

QQQ 30 min at a leading negative divegrence and a larger relative negative divegrence

 SPY institutional timeframe of 5 min

SPY 10 min since the start of the rally

And SPY 30 min

And some interesting monthly Heiken Ashi Charts, similar to candlesticks, but better in many ways.

 SPX monthly Heiken Ashi with a much more bearish Doji (compared to candlestick charts) and note the increased volume.

 Monthly Heiken Ashi NYSE clearly breaking the multi-year trend and again on increasing volume, a bearish Hanging man

And finally, the NASDAQ Composite, all NASDAQ stocks with a very bearish Doji Star on increasing volume.

I've found that just like candlesticks, the increasing volume makes the Heiken Ashi's signal much more likely to be reliable.

Perhaps more later this weekend.

Everyone have a great weekend.