Monday, July 20, 2009

MCO Reversal

Note this was originally posted on July 20, 2009 on my other blog by accident -- I've moved it over here just to keep the flow

The McClellan Oscillator has confirmed the reversal I anticipated in the last post. More importantly the 10% Index has again gone above the +500 level which indicates the market has farther to go on the upside.

We are a tad overbought here but it appears to me the market is crashing up.

What I mean by this is that it is doing the reverse of what it did in 2008 when the 10% Index kept penetrating the -500 level and the decline persisted after all attempts to rally. In my opinion the opposite is happening and all the forthcoming pullbacks should be considered as shakeouts.

The McClellan Oscillator for7/20/09
Click to enlarge

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