Monday, June 29, 2009

Summer Rally?

I remain bullish. The market has worked off the overbought readings on the 50 day percent indicator and while we could see a 2-5 day pullback in the thin pre-holiday trading, the market looks poised to move higher.

Percent Above the 200 day and 50 day Averages
Click to enlarge

Monday, June 22, 2009

Reaching Oversold Levels

We are again reaching oversold levels on the McClellan Oscillator. With the SPX testing the 50 and 200 day moving averages it is likely that we should find a low in here sometime in the next few days. It is possible that the initial bounce may be a "B" wave and not establish the final bottom. Barring a complete implosion with the 10% index going below -500, the trend still remains up

The McClellan Oscillator for June 22
Click to Enlarge

Saturday, June 6, 2009

First week of June

Some standard technical indicators with added emphasis on the period when the SPX was below the 5 year Bollinger Band. I view this period as highly significant and as extremely rare (by definition). As a result most indicators have also been out-of-limit causing most market watchers to draw incorrect conclusions. We are just now seeing the market trade inside the Bollinger Bands and the indicators are skewed because it took so long for this to occur. I would continue to watch out for short term oversold indications but remembering this:

Where we are in the market cycle should be viewed as only ONE monthly bar off the bottom (May) all pullbacks should be treated as buying opportunities.

The short term cycles, including the fibonacci counts, point to the period of June 21, give or take a few days. Around that time I would expect the direction of the market to reverse strongly. If it's declining into the June 21st period, it should be a low.

SPX Weekly & Bullish Percent Indicator
Pinkish bars are the weekly ranges.
Click to enlarge

SPX Daily and the ARMs Index.
Click to enlarge