Reader Radar: DeMark Indicators and Technical Analysis

By Andrew Nyquist
Over the past two weeks, investors have experienced a reversal in sentiment… from frustration and pessimism to hope and optimism. I often write about the importance of managing one’s emotions, and the past two weeks are a great example. As the market was nearing a bottom, I tuned out the noise and employed technical analysis to assist in finding a lower risk entry point for investing. After the market turned higher early this week, a couple readers emailed with questions on one of the types of analysis I use: DeMark Indicators.

But before I comment on this, I want to thank you all for your comments, questions, and readership — I’m very fortunate to be able share my passion with you all.

As for DeMark analysis…

On December 21, reader G.W. writes:
I enjoyed your recent post… specifically as it pertained to DeMark. I am trying to understand DeMark better and was wondering if you could elaborate about your impressions of this tool… Is there a resource that you consider to be helpful in learning more about DeMark Indicators? Many thanks and Merry Christmas!”
And on December 20, reader Ron writes:
After this 8-9 day downtrend, your chart of the SPX shows DeMark after 9 days reversing which it is doing as of this writing. Does this system reflect accurately… And after an 8-9 day down, does it mean an 8-9 day up cycle follows or something else?

Sign up for our FREE newsletter
and receive our best trading ideas and research

Thank you reader G.W. and reader Ron for your questions. Although I incorporate a number of different types of indicators and analyses into my technical charts, I do find DeMark to be a reliable source for risk management (in my opinion). DeMark Indicators is a complex type of analysis, and I am far from an expert. There are many different facets and intricacies to DeMark that I do not incorporate. I tend to focus mainly on the counts: TD setup 9’s and sequential 13’s. Although a 9 setup could be followed by another 9 setup in the opposite direction, it isn’t an “expected” outcome.  As for good DeMark learning material, I’d recommend the book “DeMark Indicators” by Jason Perl.

In short, I use basic DeMark analysis along with a host of other indicators like support, resistance, moving averages, congestion, trendlines, volume, formations, relative strength, overbought/oversold, wave counts, Fibonacci retracements, and correlations to the VIX and dollar, to name a few. In short, I try to make it my own blended style of technical analysis.

Thanks again for being a part of See It Market. Wishing you all Happy Holidays and safe travels. I’m looking forward to making See It Market even better in 2012. My very best to you and yours. ~Andy



Your comments and emails are welcome.  Readers can contact me directly at or follow me on Twitter on @andrewnyquist.  For current news and updates, be sure to “Like” See It Market on Facebook.  Thank you.

Position in S&P 500 related index fund (SPY) at time of publication.

Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of his employer or any other person or entity.