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Commentary on my Mansfield Breadth plot

In my previous post I showed a plot of the % stocks with a Mansfield Relative Strength above the zero line (organge) and % stocks with the zero line rising (blue).  I've now annotated this chart so I can add my thoughts.  The charts are interesting, not quite what I expected and, honestly, I'm not completely sure what to do with in information shown at present.

What does % stocks with Mansfield RS above the zero mean?  What does % stocks with a rising zero line mean?

I think this is best discussed by looking at the chart.  I'll run through the % Mansfield RS above the zero line first and then the % rising zero line to avoid mixing them up too much.


   

% stocks with a +ve Mansfield RS

A: At A25-35% stocks have a +ve Mansfield RS.  The majority therefore have their Mansfield RS below the zero line.  But looking at the index, D, the index is rising.  So, the index is rising but the majority of the stocks are weaker than the index used for the RS.  I would assume therefore that the mega-caps are moving the index upwards ahead of the rest of the market.  At A the % stocks is modest but slowly increasing.  At B the increase is rapid, so from B to C the % stocks stronger than the index grows to peak at C. 

At C the the number of stocks with a +ve RS peaks and then drops to plateau for a while and then drops at E down to F and final bottoms at G.  But the index is still rising up to the peak at point H, just after the bottom at G.

From G, there is a bit of a wobble, but then it rises, I but this is before the low at J.  Finally at K the % stocks stronger than the index is over 50%.  At K there is a sudden drop. so most stocks again lag the index which is the basis for the Mansfield RS.

Is this interesting?  Yes.  Does it predict what the index will do?  Unsure.  The peak C in the breadth plot is about 9 months before the index peak at H.  The bottom G in the breadth plot is about 9 months before the bottom in the index J.  But is this meaningful.  Is 9 months a coincidence?  IS the fact that the % stocks with a +ve RS increasing while the index is in Stage 4 significant?  We can assume during this time only that the mega caps are weaker than an increasing % of stocks.  But it does not necessarily tell us whether any of these stocks are in any particular stage.


% stocks with a rising zero line for the Mansfield RS

This plot is similar to the % stocks with a +ve Mansfield RS.  Its a little delayed.  The rapid increase at M is later than the one at B.  The start of the plateau N coincides with the peak, C.  At O the plateau ends.  It drops down to a minimum at P.  This after the bottom on the other curve at G but still before the bottom in the index at J.  Around Q the % stocks with an upwardly sloping Mansfield RS zero line is increasing.  It is just below 50% at the index minimum at J.  Similar to K there is a big drop at R.


Any conclusions?

This is where I struggle with this.  There must be some correlation between these charts, the market and the index.  Perhaps these indicators fortell what is going to happen, but after a 9 month delay?  But this could be happenstance?  Perhaps these indicators declining whilst the index is rising urges caution?  But what of when they are rising with the index in Stage 4?  I feel that it is good to know what they are doing but I'm not sure of the direct application.